Though once a far-off concept and the subject of science-fiction stories, artificial intelligence has developed into an essential advanced technology for the banking industry.
Artificial intelligence stands to transform all banking industries and sub-sectors as we know them. From boosting efficiency to improving the customer experience, AI is highly useful to financial service providers. For the asset management industry, the benefits of AI are immense, demanding that institutions take a closer look at all the technology it has to offer.
In this article, we will discuss the state of artificial intelligence in the banking industry before diving into a deeper discussion of how the technology is affecting asset management. Keep reading to learn how CPQi’s AI expertise can help your institution stay ahead of the competition!
A Brief Overview of Artificial Intelligence in Banking
As global financial markets become increasingly technologically literate, it is crucial for the banking industry to stay ahead of the curve.
Artificial intelligence (AI), in its simplest definition, is the use of computer science and programming to create smart machines with essential business and performance capabilities. In the banking industry, AI is responsible for numerous key tasks including automation and risk management.
AI offers many necessary functions to banks, making it clear why so many institutions have opted to implement the technology.
According to a 2021 report from Business Insider, a recent OpenText survey revealed that 75 percent of banking respondents with over $100 billion in assets are currently implementing AI strategies. For banks with less than $100 billion in assets, the numbers are still impressive with 46 percent implementing AI into their business strategies.
Benefits of Artificial Intelligence for the Banking Industry
There are many key benefits to using AI in banking – that much is clear by the sheer percentage of institutions implementing AI-based strategies.
These benefits include:
- Enhanced Customer Experiences: Machine learning has come a long way from its early days, with modern-day developments that allow for greatly enhanced customer service. Along with helping to deepen customer relations, AI can provide necessary front-facing services such as chatbots and virtual assistants that provide personalized care and recommendations for the customer.
- Smooth Front-End Processes: On the technical side of front-end service, AI offers a higher level of efficiency when it comes to customer identification and authentication. With the power of AI, financial institutions can do away with tedious customer authorization processes, allowing instead for instantaneous authentication through services such as biometric authorization and multi-factor authentication.
- Improved Middle Office Functions: While AI’s front-end capabilities and potential are vast, the technology is equally as powerful when it comes to middle and back-office processes. When developed and implemented for this purpose, AI is capable of providing necessary risk assessment functions, as well as improving AML processes and performing KYC checks.
- Automation: A major advantage to AI is that the technology can enable automated processes from front to back office. By doing so, more a banking team’s crucial time and work hours can be spent collaborating on innovative products and services, as well as focusing on furthering customer and client relationships.
How AI is Transforming the Asset Management Industry
With more clients entering into the asset management space than ever before, it has become necessary for asset management providers to consider more innovative ways to effectively deal with the increasing pool of clientele.
Aside from the basic benefits that AI can provide for any bank or financial institution, there are specific applications of the technology that can be especially advantageous for the asset management industry. As more asset management providers begin to embrace the technology, AI is likely to completely transform the industry as a whole to be more efficient, scalable, and satisfactory to customers.
Although there are many benefits of AI for asset management, there are two key advantages that providers should focus on: enhanced portfolio management and improved decisioning.
Enhanced Portfolio Management
Today’s trading markets feel much more vast and unpredictable than in years past. As a result, asset management firms are looking for innovative technologies that are capable of efficiently evaluating stocks and other assets, while also effectively managing client portfolios.
AI and machine learning possess analytical and pattern recognition capabilities that can make for drastic improvements in overall portfolio management. Along with determining the potential risks and returns of a stock, AI can also gather valuable data from across the web regarding the future of a stock, such as financial forecasts and officially reported news.
According to a December 2021 article from Forbes:
“Keeping the risk variables—such as losing mortgaged property, bankruptcy—and the qualitative aspects in consideration, AI in asset management evaluates the kinds of stocks that can fall drastically without any likeliness of rising again.”
Improved Decisioning
While many aspects of AI are immensely powerful, the technology’s data analysis abilities stand out as a significant advantage to the asset management industry.
Not only can AI collect and analyze data at lightning speed, but it can also help to translate this data into highly comprehensible insights that allow for vastly improved decisioning via improved operational efficiencies and price targeting.
Using Big Data and AI, asset management professionals who would otherwise be overwhelmed by datasets that are only increasing in size can now make sense of these numbers and crucial information in no time. AI-driven decisioning takes the weight of data labor off of these professionals’ shoulders, allowing them to focus more of their time on client needs.
Final Thoughts: CPQi’s AI Expertise for Asset Management
At CPQi, our AI technology and services are designed to provide high-level flexibility, improved customer engagement, and detailed industry insights.
For asset management providers, we can implement AI into your digital infrastructure to achieve highly accurate risk management and prediction models. Our AI solutions can assist you in making sense of vast amounts of data, both structured and unstructured.
Additionally, our AI engines are designed for continuous learning, ensuring they will evolve alongside your business.
To learn more about our AI solutions, contact our team today.
