How AI Will Change The World of Finance?
It seems like Artificial Intelligence is the newest, freshest talking point in the tech world. Given how much uncertainty has reverberated throughout the sector during the last 18 months, it is a welcome innovation. Depending on the area of finance you work in, you might be looking at AI as a welcome innovation or a disruption to the status quo.
AI could be the most significant disruptive innovation we have seen the impact the finance world since the inception of Bitcoin in 2009. Initially designed in response to the banking crisis, the anonymous, pseudonymous individual (or collective) named Satoshi Nakamoto turned the financial world on its head and conceived a multi-trillion-dollar idea that continues to play a more
significant role in our society
While it was buzzing away in the background in the first few years, people now use Bitcoin as currency in online casinos. Although some countries consider Bitcoin illegal if someone looks for a Bitcoin casino in the USA, it’s more than easy to find. So, let’s look ahead a decade from now and where we could find ourselves.
Bitcoin might be widely accepted for gambling games as it is already beginning to gather momentum as a popular avenue of payment due to the peer-to-peer wallet providing instant deposits and the fact that gamblers don’t have to deal with their bank operating in the middle of the transaction, potentially holding it up. The landscape will become digitally superpowered with AI technologies, analytical and other tools. The same can be projected to other fields as well.
Changes To Customer Service
AI will inevitably play a role in all industries. However, in finance, it could transform how we interact with financial institutions on all levels. For many of us, any contact with our bank will be general queries such as ordering a new bank card or applying for a credit card or loan. However, banks and institutions are working toward a world where these tasks are fully automated and do not require human interaction.
The idea of this for the older generation might be slightly scarier than it is for people who have grown up with the internet, smartphones, and other groundbreaking pieces of technology. Due to mass closures, many of society’s elders have been forced to do their banking online instead of in a branch. The idea of an automated bot paying their bills for them is another step away from a personal approach.
Investigations Into Money Laundering & Financial Crime
Another sector of finance that will be helped immeasurably by the rise of AI technology is the role in money laundering and financial crime investigations. AI can quickly sweep through large portions of information than a human. In addition, it will be sophisticated enough to decide how to proceed, what needs to be flagged, and why and how an investigation could be opened up.
Although this technology is highly effective at the minute, it could soon take on an entirely new dimension thanks to the amount of money and resource pouring into this technology sector.
Some traders and analysts believe that stock market activity is driven by sophisticated trading bots that buy and sell based on orders that pre-exist within the market already. It is thought that this figure is around 60%, but some research puts it as high as 80%. However, as AI continues to evolve and transform the world we live in, there’s a possibility that this figure could one day exceed 90%, with billions of dollars pumping into the accelerating development of this technology.
Some of the more recent unexplained crashes in the stock market have been attributed to algorithmic trading, so there is also a reason to be cautious. While it’s unlikely that robots will one day run the whole market, the speed at which this technology progresses is gathering momentum. So we can’t rule anything out.
This isn’t a new switch in stock trading; since the early 2000s, a lot of trading has become automated, but to see it switch to a number so high that the whole market may be automated would be fascinating.
These changes won’t come in straight away. Regulators might step in before AI starts pulling too many strings in the financial world to curb its growing influence in an area where so much wealth is at stake. However, it isn’t just the higher echelons of society that this will impact.
Plenty of customers at the lower ebbs of the financial world will soon notice the seismic changes that will soon be upon us. The real question is how much it will change the financial sector, and will it be for better or worse?