This informal CPD article on How is AI transforming finance? was provided by CFTE (Centre for Finance, Technology and Entrepreneurship) an education platform that aims to address the needs of financial professionals to upskill in a rapidly changing industry being transformed by emerging technologies.
What is Artificial Intelligence?
When most people think of Artificial Intelligence (AI), vaguely fantastical ideas come to mind. On the contrary, Artificial Intelligence is not a new concept. The field of AI was formally introduced in 1956, at a Dartmouth college conference. AI in the financial sector is ubiquitous, the real question is—how will its transformation grow?
Now, let’s get down to business.
Section 1.1
Considering the broad scope of Artificial Intelligence, it is difficult to pinpoint what it is. Further, it has a broad definition which differs from one academic paper to another. To illustrate, we can look at an AlphaZero study that showcased an AI algorithm beating the reigning world champion in chess. Thus, it can be said that Artificial Intelligence is very much related to Neural Networks.
A Neural Network is system software that works similar to the tasks performed by neurons of a human brain. In other words, Artificial Intelligence refers to the ability of a computer program or a machine to think and learn.
Section 1.2
Keeping in theme with the topic of this article, let’s discuss a few examples that are commonly leveraged within the financial industry.
Some of the use cases are as follows:
- Alphasense
Alphasense is an AI powered search engine that utilises Natural Language Processing to analyse keyword searches within filings, transcripts, research and the news to discover changes in the financial industry.
- Shape Security
Based in the U.S, Shape Security utilises Machine Learning models that are trained to pinpoint fake users, effectively preventing credit application fraud and credential stuffing for their financial institution clients.
- Scienaptic Systems
Having scored over 100 million customers, Scienaptic’s Ether connects structured and unstructured data to offer contextual underwriting intelligence. This provides banks and credit institutions with more transparency when cutting losses.