The Impact of Artificial Intelligence (AI) on Fintech

Attributed to: Aditya Kumar, Founder & CEO, Qbera.com

The role of AI and related technologies in enabling various industry and service-oriented businesses to scale greater heights has been quite the subject of awe and admiration. Artificial Intelligence helps Fintechs and financial firms address and solve human problems, and consequently improve overall efficiency.

As a matter of fact, multiple technologies have empowered financial firms to almost completely transform their processes and subsequently generate superior results - technologies such as Big Data Analytics, Neural Networks, Machine Learning and breakthrough algorithms have enabled financial companies to provide customers with a more refined experience, keep datasets intact and accurate, and make highly informed decisions to offset the unfavourable impacts of risk.

If we are to look at Artificial Intelligence, in particular, the impact has been absolutely tremendous in recent years. Through AI, Fintech firms and lending institutions have been able to more accurately assess a borrower’s creditworthiness by collating large swathes of data and instantly making viable lending decisions.  Fintech firms, especially new-age lending firms, have very actively adopted AI to scale-up the efficiency of service delivery by making more accurate and seamless credit-related decisions

Let’s look at some areas where AI is empowering Fintechs to make service delivery more seamless and unified.

Determining initial loan eligibility

When you apply for an instant personal loan from a Fintech lender, your credit profile is immediately obtained from the bureau and evaluated automatically through AI-powered algorithms. Various parameters in a customer’s credit report are analysed against Qbera’s internal credit norms and approval is determined almost instantly.

Retrieving information from Bank Statements

Fintech lenders require customers to provide their bank statements as part of the lending process. AI-powered algorithms help to pull-out essential information from lengthy bank statements in absolutely no time, allowing for quicker and more accurate profile assessments.

Chatbots for enhanced customer interactions

Several lending institutions have been seen employing chatbots to make customer interactions more transparent and provide customers with a smooth and trouble-free experience. Chatbots communicate with customers through AI technology, helping them with solutions to their queries, tracking transactions and obtaining product and service-related information.

Tracking flow of funds and money management

AI, along with big data analytics and block-chain, is assisting Fintechs in accurately tracking fund flows and manage their money better. Tracking fund inflows and outflows, commissions, operational costs, risk-sharing information, profits, determining interest rates on the case-to-case basis’ through risk-based pricing, and other aspects of money management are carried out through AI-powered data and information frameworks.

Analysing information from credit reports

Once the initial eligibility checks are carried out, AI-driven algorithmic frameworks allow Fintechs to scan through large amounts of information form lengthy credit reports to promote more accurate and error-free decision making. Risk assessments are carried out on a case-to-case basis and by way of information retrieved from credit reports and subsequent risk-based pricing, appropriate interest rates in line with projected revenue generation, unit economics and future growth aspirations are arrived at.

Fraud detection 

Another area where AI plays a major role is in fraud detection and busting. AI technological frameworks help to instantly detect deviations pointing to potential fraud and help Fintechs and banking institutions to shield themselves from detrimental effects emanating from lack of fool-proof systems to tackle potential fraud.