{"id":5981,"date":"2018-05-24T10:20:04","date_gmt":"2018-05-24T10:20:04","guid":{"rendered":"https:\/\/insights.invyo.io\/europe\/?p=5981"},"modified":"2019-02-07T17:45:54","modified_gmt":"2019-02-07T17:45:54","slug":"use-cases-of-ai-based-fintech-solutions-from-fraud-detection-to-big-data-mining","status":"publish","type":"post","link":"https:\/\/insights.invyo.io\/europe\/analyses\/use-cases-of-ai-based-fintech-solutions-from-fraud-detection-to-big-data-mining\/","title":{"rendered":"Use cases of AI-based FinTech solutions: from fraud detection to big data mining"},"content":{"rendered":"<p><strong>Artificial Intelligence has caught the attention of the world, including financial institutions. While AI-based FinTech solutions may not get the same attention than autonomous cars or robot dogs, its impact will undoubtedly be felt.<\/strong><\/p>\n<hr \/>\n<h4 style=\"text-align: center;\">MORE DATA WITH\u00a0<a href=\"https:\/\/invyo.io\/\" target=\"_blank\" rel=\"noopener\"><strong>INVYO ANALYTICS<\/strong><\/a><\/h4>\n<p style=\"text-align: center;\">Access free demo now<\/p>\n<hr \/>\n<p>AI-based FinTech solutions will both <strong>save financial institutions billions<\/strong> in cost and create billions in additional revenues, potentially creating more than a <strong>trillion in additional profits<\/strong> in the financial services industry.<\/p>\n<p>A study done by Accenture showed that the <strong>implementation of AI<\/strong> in the financial sector could lead to a <strong>31% increase in profitability<\/strong> rates by 2035.[1] Moreover, AI will allow to customize financial services delivered to clients, leading to an <strong>enhanced customer experience<\/strong>.<\/p>\n<h3>USE CASE 1:\u00a0AI for fraud detection<\/h3>\n<p>Fraud detection and management is imperative for financial institutions now more than ever, as they are faced with new and more sophisticated threats to <strong>client data and security breaches<\/strong>. Banks could face fines of more than a billion dollar for <strong>failing to meet government standards<\/strong> against money laundering, GDPR regulations and other financial crimes. This has lead to a drastic increase in <strong>anti-fraud efforts by banks<\/strong>, many of which have proven to be time consuming and costly.<\/p>\n<p>However, with the rise of AI-based FinTech solutions, banks now have the opportunity to <strong>fight against fraud<\/strong> more effectively, effortlessly and at a fraction of the cost.<\/p>\n<h4>Example: Ayasdi by HSBC<\/h4>\n<figure id=\"attachment_5983\" aria-describedby=\"caption-attachment-5983\" style=\"width: 150px\" class=\"wp-caption alignleft\"><img decoding=\"async\" loading=\"lazy\" class=\"wp-image-5983 size-thumbnail\" src=\"https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi-150x150.png\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi-150x150.png 150w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi-300x300.png 300w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi.png 768w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi-56x56.png 56w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi-50x50.png 50w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_hsbc-ayasdi-700x700.png 700w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><figcaption id=\"caption-attachment-5983\" class=\"wp-caption-text\">Ayasdi by HSBC<\/figcaption><\/figure>\n<p>HSBC is an extreme example of the costliness of <strong>not being compliant with AML laws<\/strong>; the company was <strong>fined $1.9 billion<\/strong> for its failure to <strong>control money laundering<\/strong>.<\/p>\n<p>As part of its effort to prevent this from happening again, HSBC implemented Ayasdi\u2019s solutions. <a href=\"https:\/\/www.ayasdi.com\/\" target=\"_blank\" rel=\"noopener\"><strong>Ayasdi<\/strong><\/a> is a FinTech venture that provides <strong>anti-fraud solutions to banks<\/strong>. They found that many of the world\u2019s best banks had false positive rates <strong>of up to 95%<\/strong> or higher. Using Ayasdi\u2019s AML solution, HSBC found a <strong>reduction of 20% in false positives<\/strong>, without reducing the number of cases reported for suspicious activity.[2]<\/p>\n<p>Thus, HSBC was able to <strong>save thousands of hours<\/strong> investigating compliance risks and in addition HSBC met many of the government required compliance regulations, saving them from being subject to further government-imposed fines.<\/p>\n<p>The ability of AI to make such a significant impact on <strong>fighting against fraud<\/strong> will save financial institutions immense amounts of money and will ensure that their <strong>clients\u2019 money and personal information is safe<\/strong>.<\/p>\n<h3>USE CASE 2:\u00a0AI for big data mining<\/h3>\n<p>Another key use case for AI in financial institutions is <strong>big data mining and process improvement<\/strong>. Banks are flooded with consumer data, legal documents, etc. and are unable to <strong>review or analyze<\/strong> a fraction of the information they hold. FinTech ventures that utilize AI are able to drastically <strong>reduce the time<\/strong> it takes financial institutions to <strong>analyze their data and improve their processes<\/strong>, while also freeing their employees from working on mundane tasks.<\/p>\n<h4>Example: COIN by JP Morgan<\/h4>\n<figure id=\"attachment_5987\" aria-describedby=\"caption-attachment-5987\" style=\"width: 150px\" class=\"wp-caption alignleft\"><img decoding=\"async\" loading=\"lazy\" class=\"wp-image-5987 size-thumbnail\" src=\"https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_coin-jp-morgan-ai-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_coin-jp-morgan-ai-150x150.jpg 150w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_coin-jp-morgan-ai-56x56.jpg 56w, https:\/\/insights.invyo.io\/europe\/wp-content\/uploads\/2018\/05\/Techfoliance-europe_coin-jp-morgan-ai-50x50.jpg 50w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><figcaption id=\"caption-attachment-5987\" class=\"wp-caption-text\">COIN by JP Morgan<\/figcaption><\/figure>\n<p>JP Morgan implemented a program called Contract Intelligence (COIN), an AI system tasked to <strong>analyze documents quicker<\/strong> and decrease errors made while analyzing these document.<\/p>\n<p>COIN was able to analyze <strong>12,000 annual commercial credit agreements<\/strong> in a matter of seconds.<\/p>\n<p>Prior to utilizing COIN it took JP Morgan employees <strong>360,000 hours<\/strong> to analyze the same amount of documents.[3] Using COIN, JP Morgan was also able to <strong>reduce errors<\/strong> made in analyzing the documents.<\/p>\n<p>The application of AI solutions is and will continue to <strong>save financial institutions time and money<\/strong> on tasks that are mundane but necessary.<\/p>\n<h3>USE CASE 3:\u00a0AI for back-office operation<\/h3>\n<p>Lastly, AI FinTech solutions have proven that they can have an immense impact on <strong>financial institutions in back-office operation. <\/strong>AI also has great potential to <strong>improve user experience<\/strong> with financial institutions through <strong>client facing solutions<\/strong>.<\/p>\n<p>A recent survey reported that[4]:<\/p>\n<blockquote><p>76% of bankers \u201cbelieve that in the next three years, the majority of organizations in the banking industry will deploy AI interfaces as their primary point for interacting with customers.\u201d<\/p><\/blockquote>\n<p>A common use case for AI in the front office is <strong>customer service bots<\/strong>. However, more advanced technologies have lead to a wider variety of solutions such as <strong>automated advisory assistants<\/strong> that take into account the clients&#8217; interests, financial portfolio, financial history, and desire risk to offer them individualized investment strategies.<\/p>\n<p>These solutions provide clients with in-depth, personalized services; allowing financial institutions to <strong>create more value for the client<\/strong>, without sacrificing time spent of its employees.<\/p>\n<p>On May 28<sup>th<\/sup>,\u00a0FinTech-Aviv will host a summer kick-off event at Rise Tel Aviv that will be focusing on AI-based innovations for the Financial Industry; visit the <a href=\"https:\/\/www.meetup.com\/FinTech-Aviv\/events\/250509328\/\">FinTech-Aviv<\/a> meetup page to register; the event will also be broadcast live on the FinTech-Aviv\u00a0<a href=\"https:\/\/www.facebook.com\/groups\/302772410061003\/\" class=\"broken_link\">Facebook page<\/a>.<\/p>\n<hr \/>\n<p><strong>Want more data about fintech startups? Access your own dashboard with\u00a0<a href=\"https:\/\/invyo.io\/\" target=\"_blank\" rel=\"noopener\">INVYO Analytics<\/a>\u00a0or\u00a0<a href=\"https:\/\/analytics.invyo.io\/index.php\" target=\"_blank\" rel=\"noopener\" class=\"broken_link\">Sign up<\/a>\u00a0for free now.<\/strong><\/p>\n<hr \/>\n<p>[1] Purdy, Mark. \u201cHow AI boosts industry profits and innovation.\u201d <em>Accenture<\/em>. 2017.<\/p>\n<p>[2] Irrera, Anna. \u201cHSBC partners with AI startup to combat money laundering.\u201d\u00a0<em>Reuters<\/em>. 1 Jun 2017.<\/p>\n<p>[3] Rieker, Falk \u201cWhy 2017 was pivotal for AI transformation in the financial industry.\u201d <em>CIO<\/em>. 18 Dec, 2017.<\/p>\n<p>[4] McIntyre, Alan. \u201cBanking Technology Vision 2017.\u201d <em>Accenture<\/em>. 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Artificial Intelligence has caught the attention of the world, including financial institutions. While AI-based FinTech solutions may not get the same attention than autonomous cars or robot dogs, its impact will undoubtedly be felt. MORE DATA WITH\u00a0INVYO ANALYTICS Access free demo now AI-based FinTech solutions will both save financial institutions billions in cost and create [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":5993,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[551],"tags":[240,2015,928,239,2019,2012,2017,2016,1675,1088,2013,663,1531,1523,2018,1869,280,1745,1825,1382,1953,2014,296,1674,2020,809,2011,245],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Use cases of AI-based FinTech solutions: from fraud detection to big data mining - INVYO Insights Europe : Media Fintech<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insights.invyo.io\/europe\/analyses\/use-cases-of-ai-based-fintech-solutions-from-fraud-detection-to-big-data-mining\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Use cases of AI-based FinTech solutions: from fraud detection to big data mining - INVYO Insights Europe : Media Fintech\" \/>\n<meta property=\"og:description\" content=\"Artificial Intelligence has caught the attention of the world, including financial institutions. While AI-based FinTech solutions may not get the same attention than autonomous cars or robot dogs, its impact will undoubtedly be felt. 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