Artificial intelligence in fintech

Artificial intelligence (AI) is transforming the financial industry. It is increasing the speed, accuracy and efficiency of financial services. Investment banking can benefit from machine learning algorithms that analyse large amounts of data to identify patterns and trends for risk analysis, market prediction and portfolio management. Natural Language Processing can help analyse news and public sentiment to predict market fluctuations, while reinforcement of learning algorithms can optimise portfolio management strategies. In commercial banking, machine learning can be used for predictive analytics to assess credit risk and AI-powered chatbots to provide personalised financial advice based on a customer's financial goals.
Mobile financial service can also leverage AI-powered fraud detection and prevention to enhance security and customer trust. At present, AI is already transforming the financial industry, opening up new business models and opportunities for financial institutions such as robo-advisory services, peer-to-peer lending platforms and digital wallets. However, with these opportunities there come challenges such as ethical use of AI, data privacy concerns, potential biases in algorithmic decision-making, need for continued upskilling of the workforce and the high cost of implementation.
There is also a concern whether AI is going to replace human jobs or not. However, jobs like financial analysis, strategic planning and decision-making are less likely to be replaced by AI as they require critical thinking, creativity, and human judgment. The use of AI can assist professionals in tasks such as data analysis, risk assessment and market prediction, allowing them to make more informed and efficient decisions and reduce the risk of errors in bookkeeping. Hence, the need of financial analysts, research analysts, portfolio managers, hedge fund managers and auditors may not change that much. As AI continues to develop and improve, companies must adapt to remain competitive and the fintech sector must ensure the responsible use of this powerful technology for the betterment of the world economy.

Ifaez Amin Chowdhury,
Student of Department of Accounting and Finance,
School of Business and Economics,
North South University, Dhaka,
ifaez.chowdhury@northsouth.edu