Gen-AI for the Finance Industry
- Yasin Ali
- Jul 26, 2023
- 3 min read
You can see the intro to generative AI on the blog here.
We're all tied into Finance, it runs our world from bank accounts, mortgages, investments, financial services, economics etc. We touch a variety of financial products across our lives so its understandably a huge industry across the world!
But what opportunities are there for us with Generative AI being infused with the Finance Industry? Lets see!
Extracted from ChatGPT - you'll see my personal thoughts in blue with some thoughts, criticism and ideas!
1. Personalized Financial Advice for Consumers: Generative AI-powered chatbots can provide personalized financial advice to individual consumers. These chatbots can analyse a person's financial data, spending habits, and investment preferences to offer tailored recommendations. For example, a generative AI chatbot can assess a user's income, expenses, and savings goals to suggest a customized budgeting plan or investment strategy.
Yasin: Having an AI chatbot that uses APIs to get your customer information - and then overlaying it with generative AI to give you a holistic view on your spending and income.
Feature for Thought:
An AI chatbot that can help me achieve a goal I set, i.e. deposit for a mortgage, one-time special purchase etc. With a holistic view on my accounts it can recommend me either alternative products that match my spending habits but are cheaper and can help me achieve my goal x times sooner!
2. Automated Financial Planning: Generative AI algorithms can automate the financial planning process for individuals. By inputting their financial goals and risk tolerance, consumers can receive comprehensive financial plans, including retirement planning, investment recommendations, and debt management strategies. These plans can be continuously updated based on changing circumstances, ensuring a more dynamic and adaptive approach to financial planning.
Yasin: I love this one, helping you get the most out of your investment. Consolidating retirement funds, ISA Stock Funds and debts all in one place. Adjusting your risk tolerance and getting advice on how this can benefit you would encourage more people to invest into the markets.
However, nobody can be a fortune teller when it comes to investments - there are some broad trends that you can follow - but I would still prefer people to give their own thoughts along side what the trends are showing.
3. Fraud Detection and Prevention: Generative AI can enhance fraud detection capabilities for financial institutions and protect consumers from unauthorized transactions. AI algorithms can analyse historical transaction data and identify patterns indicative of fraudulent activities, promptly alerting consumers and financial institutions to potential threats.
Yasin: All I'm going to say is watch this guys YouTube Channel - if Gen AI can stop these scammers I'm ALL FOR IT!
https://www.youtube.com/@ScammerPayback
4. Automated Credit Underwriting for Small Businesses: For small businesses seeking loans, generative AI can streamline the credit underwriting process. By analysing vast amounts of business data, including financial statements, cash flow, and transaction history, AI algorithms can provide lenders with more accurate risk assessments. This enables faster and more informed lending decisions, increasing accessibility to capital for small businesses.
Yasin: YES - as the co-founder of Sabr Remedies - it takes so much time with accountants to get this view ready. Having this automated in real-time giving an accurate view of where my business is today, and using this information to assist in lending is FANTASTIC.
Lets move away from historical statements and have a present-day view on my financial status as a small business. Lets take into account social presence, charity donations and other key factors into account to help speed up the lending process.
5. Automated Compliance and Risk Management: Financial institutions deal with complex regulatory requirements. Generative AI can streamline compliance processes by automating data analysis for risk management, anti-money laundering (AML) efforts, and Know Your Customer (KYC) procedures. This not only reduces manual workloads but also helps institutions stay compliant with evolving regulations.
Yasin: Another big one here - understanding VAT, Tax allowances, end of year accounts... these are all headaches I'd rather have some automation around. The things I mentioned already have pre-defined rules and parameters around them... having it automated would be sublime.
If and when regulations relevant to my business do change, it'd be nice to get some guidance on what I need to change - within the context of what I already have.
Needless to say - I'm very excited for the work happening in the finance space. It's not about making money, its about having access to the information out there on what you should do with the money you have.
Catch you in the next blog!
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