Firstly, let us have a brief introduction about Big-Data & AI –
Big Data is high-volume, high-velocity, and high-variety data;
this data is so large which is difficult to deal with.
It requires complex calculations to make data meaningful.
AI is the simulation of human intelligence in machines;
that are programmed to think and act like humans.
Now, the question arises-
Why do we need Big data & AI in finance?
Big data & AI can make advances in finance sector by having-
- A better insight of current and future performance
- Deeper knowledge of customer behaviors
- Important key performance indicators for decision-making
- Greater capacity to experiment, learn, and improve
- An advantage over less advanced competitors
Benefits of having Big data & AI in finance sector
Recent advances in digital technology & big data have allowed
The Fintech (Finance technology) companies to
Reduce the high cost of credit and increase financial services.
Objectives that aims to improve the financial services include-
- Massive bank enrollment
- Financial literacy programs
- Payment system solutions
- Mobile banking and digital finance schemes.
AI and big data improvise to improve the efficiency;
Also, the risk management process of financial services providers.
Hence, it will lead to evolution of smart financial products and services to consumers;
And simplify the account opening process.
Problems that may arise in this process-
Need to train AI algorithms to process large customer information.
Shortage of skilled AI workers.
Another issue is the concern that AI will increase unemployment in the finance sector.
AI systems may have unconscious bias in their design;
Which may lead to financial exclusion for people with ailments and elders.
Privacy laws may become too strict;
And this will hinder AI from achieving its full potential.
Though the era of AI and big data has great promise for society;
Still, there are some issues that needs to be carefully addressed.
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