Although artificial intelligence is often associated with robots and self-driving cars, it has been disrupting the financial services sector long before chatbots and robotic process automation. AI in finance is reshaping the industry, from inclusion to wealth management and providing personalized financial services.
1. Building personalized finance
Consumers are expecting personalized services from retailers, according to a report by Deloitte.  This is no different for the financial services sector, as mobile applications, companies and services cater to user demand for personalization – from marketing emails addressed to a customer’s name, to digital banks providing a personalized service for every customer.
AI in finance allows for customers to track their spending habits, in the case of budgeting apps, while banking apps can offer savings recommendations based on a customer’s income, spending, habits and more factors. In addition, finance apps utilizing AI can also recommend users to take investment decisions based on information in the market, the performance of stock and through analysis – acting as a personal financial advisor.
2. Empowering excluded communities
The use of AI in finance is making financial services more affordable for individuals and businesses, and in technical terms is known as financial inclusion. Traditionally, credit score is calculated according to previous bank transactions and information; however, when this data is absent, an individual may not receive credit, causing financial exclusion. In 2017, 1.7 billion people globally were unbanked, according to the Global Findex database published by the World Bank.  Around 15% of rural consumers above 25 years old are also “credit invisible” according to the Consumer Financial Protection Bureau. 
AI and blockchain can help gather information and data to obtain credit through non-traditional methods, such as through data on an individual’s phone – identified as ‘features’ describing their behavior. AI can gather this data to relate ‘features’ to each other and create a credit score on the basis of previous “loan behavior”. Hence, AI is making financial services more accessible to a larger number of people who otherwise would be unable to receive the service.
3. Enabling wealth management for HNWIs
High-net-worth individuals require a financial management system to manage funds, investments, and stay ahead of the market. AI systems can track patterns in the market and analyze the best time to invest, while also connecting large and otherwise unrelated information to create an intelligent pattern to guide HNWIs in investment decisions. In this way, AI in finance can automate the investment management process through mediums such as Investera, a financial management platform that aims to facilitate and manage the entire investment process.
4. Preventing fraud
Fraud detection and prevention is also one of the pivotal ways in which AI is enhancing the financial industry, as it can more effectively identify and pinpoint credit card fraud through its analysis of transactional data and consumer data. By identifying irregular behavior, AI can efficiently detect fraudulent transactions.
What’s the future of AI in finance?
Its ability to connect large volumes of data can place AI on the frontiers of organizing data across the financial sector; in this way, AI can be the base of the financial industry, rather than only a disruptor. As automation becomes integral to finance, AI paves the way for more enhanced, personalized, and secure financial services.
If you are interested in how other technologies are automating the financial industry, read more here.
 The World Bank