Artificial Intelligence (AI) is a popular trend these days, but it seems so abstract that it is easy to assume only people savvy with technology should be concerned about it. This is far from the truth.
AI is expected to add $13 trillion to the global economy within the next decade. It is helping to make the world a faster and smarter place, so every savvy investor and wealth collector needs to pay attention to it. AI is not a passing trend that will one day become popular, rather it is at the centre of every leading industry in the world today.
American computer scientist, John McCarthy, who was also one of the founders of the discipline of artificial intelligence, defined AI as “the science and engineering of making intelligent machines, especially intelligent computer programs. It is related to the similar task of using computers to understand human intelligence.”
This means that the goal of AI is to create machines that think and act like humans and use human intelligence to solve problems and perform tasks that are ordinarily done by people but in a more efficient manner. Machine learning is the most popular branch of AI at this time and it simply means the creation of systems that can learn from their experiences and data gathered without human intervention.
AI is already a part of our everyday lives. We use it when we check emails while shopping online and for ease of connection with our friends and family on social media. Google uses AI to predict what you want to search for online and finishes your sentences for you. Also, when you get directions to a venue with your digital maps, you are using AI.
It is therefore evident that, just as AI has changed our daily lives, it will also change how we do business, manage finances and invest wealth. Investment expert and prominent member of the “Shark Tank” team, Mark Cuban, said, “As big as PCs were an impact, as big as the internet was, AI is just going to dwarf it. And if you don’t understand it, you’re going to fall behind. Particularly if you run a business.”
The financial world has evolved and developed smart solutions to keep up with the unique needs of consumers in the digital age. Here are few ways that AI has changed and is changing the world of finance and investing:
Fraud prevention
Technology is currently being used to spot credit card fraud and money laundering by monitoring large deposits and unusual activity. Money can be moved around very quickly online and this has caused an increase in fraud. AI-based systems can now analyse normal customer behaviour and quickly detect when something is out of the ordinary.
Data-driven investments
AI applications are used to regulate the supply, demand, and pricing of securities. They are also able to accurately predict stock performance by analyzing past data. Furthermore, AI systems can provide more personalized investment options by taking into account the investor’s goals, and previous financial habits.
Personal banking
Personal banking applications are also a product of AI and they are used to provide customized services to the consumer at the touch of a button. Customers no longer need to go to the physical bank branch to carry out routine tasks such as checking balance, requesting statements and monitoring account activity.
Increased accuracy in financial markets
AI is transforming the financial markets by ensuring increased accuracy in analysis, predictions and trading decisions. Smart advisers in the stock market can analyze a massive amount of data and carry out trades at a satisfactory price. Also, National Association of Securities Dealers Automated Quotations (NASDAQ) is using artificial intelligence to detect irregular and potentially malicious trading activity on the U.S. stock market. In the area of forex, AI has brought massive improvement through predictive analytics programmes which identify market patterns and make fewer errors in processing data.
There’s no denying that AI has brought disruptions to the world of finance and investing. The landscape is changing rapidly and both financial organizations and their customers will need to adjust accordingly. However, it is safe to say that the improvements already brought on by AI have made this change something we can look forward to rather than dread.