Machine learning is having a significant impact on nearly every industry, including fintech. More companies are starting to realise the huge potential of incorporating machine learning into their products and services, but what are some of the main ways machine learning improves fintech? In this article, we’ll discuss three areas where machine learning is having the most significant impact.
- Improved Trading and Wealth Management
Machine learning is revolutionising every aspect of trading. Whether it’s identifying patterns in the market or assessing investment risks, machine learning makes investment decisions a lot easier and faster. Fintech firm, 8topuz, is a leader in incorporating machine learning into their financial decisions and trades. They have successfully utilised machine learning to help deliver consistent returns for their clients. Automated investing solutions like 8topuz have helped to automate the trading and investing process and opened up the possibility of investing to the masses.
According to Techfunnel, 73 percent of daily trading worldwide is now carried out by machines. This goes to show the vast impact machine learning is having on the industry and why now every major financial company is investing in the area.
- Fraud Prevention
Although technology is transforming how we manage our finances, unfortunately, it also comes with an increase in online fraud. According to Javelin’s 2018 Identity Fraud Report, almost 17 million organisations and customers in the US have now experienced fraud. Fraud is currently a massive issue for Fintech firms. However, machine learning is playing a pivotal role in addressing the issue. As machine learning can quickly analyse vast amounts of data, it can efficiently find patterns and recognise potential fraudulent processes.
Fintech companies like Feedzai enable machine learning technology to manage financial crime for the world’s largest banks, merchants, and processors. Their systems can detect up to 95 percent of all fraud. Innovative solutions such as these are vital in helping fintech providers fight fraud effectively and effortlessly.
- Better Customer Service
Customers are increasingly wanting quick answers and solutions to the problems they’re facing. A recent study by SuperOffice found that 88% of customers now expect a response from a business within 60 minutes. This poses an issue for most fintech businesses, as they often don’t have the workforce to respond to customers queries that quickly.
Enter machine learning. Fintech businesses are now turning to technology like chatbots, in order to provide better customer service and experience. These intelligent and client-oriented chatbots can not only deliver a great customer experience, but also help fintech firms to save time as well as money.
Machine learning is playing an increasingly important role in the fintech industry, and it looks set to benefit fintechs even more in the future. As long as the market keeps on demanding easier and faster transactions, innovative machine learning applications will continue to emerge for the fintech sector.
It’s now clear that if fintechs fail to incorporate emerging technologies like machine learning and artificial intelligence into their business model, they risk falling behind.