The Importance of Artificial Intelligence in the Financial Industry

Introduction
Decision making is a kind of process which is used for gathering
information in order to identify the problems and selecting the best
process in the industry. Decision making is the main part of managerial
work where managers or leaders take decisions and produce the result of
an action (West, and Bhattacharya, 2016). Supporters believe that a
significant amount of management decision making can be replaced by
Artificial Intelligence. AI has the potential for making an effective
decision-making approach and it provides a platform solving problems
occurred in industries. The aim of this essay is to evaluate the
importance of artificial intelligence in financial industry along with their
impacts. The main benefit of AI is that it is increasing the speed of work,
solving customer problems and improving customer experience, and
reducing labour and decreasing resource coats. But the question is how
beneficial this is to work environment. This essay will describe the
advantages and disadvantages of AI and examine their significance in the
field of financial sectors.
Discussion
AI in the financial industry
The artificial intelligence plays a major role in the field of the financial
industry and improves the overall performance of the banking sectors.
The use of AI technology is growing rapidly and it has the potential to
reduce risks and issues faced by the financial industry in an effective
manner (Ivanov, and Webster, 2017). Artificial intelligence provides a
platform to financial industries for personalizing suggestion and
identifies the better process for improving the performance of financial
sectors. A recent study identified that AI technology deliver a faster,
more effective assessment of a potential borrower and reduce risks from
the system which leads to a better decision for the company. Artificial
intelligence has the potential for identifying the risk factors linked with

the financial industry and protects computer networks and private data
from fraud or hacking (Dunis, et al., 2016).
It is analysed that in the field of the financial industry such kind of
technology is more accurate for preventing credit and debit cards from
hackers and predict the future security risks and issues which help
organization for monitoring their performance (Ng, 2016). The rate of
cyber-attack is growing rapidly in financial industries where hackers
attack the computer networks and collect the personal details of users
along with their bank details. For this situation the artificial intelligence
control and monitor the computer networks used by the financial
industry and improve the security of user's personal information.
Artificial intelligence has involved in our day to day life. To maintain a
competitive edge, the financial industry has launched many artificial
intelligence applications with the latest advances. Financial industry
such as banking industry using AI-based solution for many banking or
internet banking problems (Moro, Cortez, and Rita, 2015). For example,
AI covers 3 main areas in the financial industry which are described
below:
Customers
Banks have huge customer burden and responsibility and for maintaining
customer’s loyalty banks using AI to increase efficiency and maintain
customer satisfaction. Moreover, such type of technology provide better
services to their customers and provide a way to communicate with
banks in an effective manner and solve problems faced by other
customers. Mainly, artificial intelligence reduces the communication gap
between consumer and financial industry that help the management
team for improving the rate of customer satisfaction.
Middle office
Artificial intelligence plays a crucial character in the middle office where
it controls and manages the entire system and networks used by banking
industries. It is observed that with the help of AI technology middle office

can enhance data quality, data analysis and computer system in an
effective manner. Moreover, financial companies can track their
performance and resolve issues and problems faced by the middle office
in terms of data analysing and managing. A chatbot is one of the best
examples of AI technology which is used in the middle office for solving
queries and problems faced by consumers in very less time. Therefore, by
using this technology middle office of financial industries can enhance
their performance and solve customer’s problems in very less time.
Fraud detection
In this modern era financial industries are facing the issue of data breach
and fraud cases due to which many consumers can lose their personal
information. Artificial intelligence has the ability to avoid fraud cases and
improve the security of the user’s data and bank details.
AI impacts on the managerial functions
Artificial intelligence has the potential to become a game changer for the
overall industry. Artificial intelligence basically is the technology which
works with the objectives of making a system, software or a robot think
like a human mind.
With technological advancement, various companies are embracing
robotics as well as artificial intelligence in their business process. Hence
the level of automation and involvement of robotics in any business
sector is increasing tremendously. In the finance sector, AI is being
embraced by companies to reduce time as well as the cost involved in
financial planning as well as to enhance to overall accuracy. Image
recognition software is being embraced by companies to analyse the
legal documents and extract financial data from the same (Kokina, and
Davenport, 2017).
AI will be used to suggest the investment of companies, based on past
records. Project planning and resource and fund allocation, based on task
complexity are being facilitated by AI algorithms (Irani, and Kamal,