Artificial intelligence (AI) refers to technology that actively responds according to existing data and adjusts to new data, including user behavior. AI is infiltrating multiple industries, including the financial sector. In this article, we will discuss how AI has affected the financial industry and the financial AI tools you should know.
Artificial Intelligence (AI): Basics
Most online programs are static – they operate the same way every time they are used and produce the same results every time. AI is unique in that its programming is designed to adjust when it receives new information. If you ask an AI program a particular question, it will give you a response based on the information it has. If you ask the same question a month later, it may give you a better response based on new information. People often adjust or elevate responses to certain questions when they receive new information, too. The program essentially “learns” just like a person would. AI is also designed to cater to user preferences and habits. For example, AI programs can adjust suggested products as they receive new data from a user. It can also adjust gameplay in chess according to how the user plays.
People and corporations are using AI to streamline processes and make operations more efficient. AI can provide basic customer service, reducing the workload on customer service representatives. It’s also used to do research. But how exactly does AI impact the financial sector?
Financial Artificial Intelligence
Investment Recommendations
Most investors need guidance regarding what investments suit their needs. There are thousands of public companies. Financial advisors sift through these public companies to find investment opportunities for their clients based on their preferred investment strategy. Going independent as a financial advisor
Investment strategies include:
- Growth investing – investing in companies with established value and presumed long-term growth despite a potentially high share price
- Value investing – investing in companies when shares are low and selling high in a short-term strategy
- Quality investing – investing in companies based on specific desirable characteristics
- Index investing – passive investing
The market fluctuates every day. Financial AI can be used to identify the best investment opportunities based on recent stock market data.
Benefits of AI in Finance
The application of AI in finance comes with significant benefits for both financial institutions and their clients. It saves a lot of time by providing the most recent data quickly and efficiently. It also has the ability to learn a particular client’s preferences and produce suggestions best suited to them.
AI in finance industry can’t replace financial advisors. However, it is a useful tool.
Things to Consider When Using AI in the Financial Sector
While AI provides valuable information quickly, it’s still a relatively new technology. Like any new technology, there are still some questions regarding the results it produces. Since it emits data based on the data it receives, it can produce errors if it encounters incorrect information. You will need to teach your AI to correct any errors you find to prevent them in the future. You will need to add a human element to all results to ensure the best service to your clients.
Investment Opportunities
The AI industry is booming. It’s not only a useful tool to guide people with their investments. It’s also a great investment opportunity in and of itself. AI is a growing industry with the government spending $3.3 billion on AI in 2022. And that’s only a portion of the $16 billion industry that is expected to double by the end of the decade.
While the industry is ever-changing, here are some of the best performing AI stocks at the moment:
- NVIDIA Corp – NVDA
- Symbotic Inc – SYM
- AeroVironment Inc. – AVAV
- Intuitive Surgical Inc – ISRG
- SoundHound AI Inc – SOUN
AI Tools for Finance
There are AI tools available for whatever your financial needs, whether you are a single investor or a financial institution.
Some of the most popular AI tools in finance include:
- Datarails FP&A Genius
- Domo
- Booke.AI
- Stampli
- Nanonets
These programs offer the same general services. However, they will vary based on price, security, and technology. Talk to your financial advisor to learn which program they recommend for your purposes.
AI Consulting
With all of the different programs out there, it can be difficult to know which one is right for you. Picking the right program is essential, especially if you use it in a professional capacity to help guide your clients. AI consulting services take away the guesswork. A consultant will examine your business to determine the best solution for your company. Once you select your AI program, your consultant can train you on how to make the most of its features.
AI is becoming standard practice in the financial industry. Without the proper tools, you won’t be able to remain competitive. You should embrace the technological advancements in the financial industry instead of shying away from them. You don’t necessarily need to use the tools as your sole research method. However, it’s a useful guide to get you started with any particular client. It may recommend investments you wouldn’t have otherwise considered and encourage you to research the investment more.
Conclusion
Investing doesn’t have to be risky when you have the information you need to make informed decisions. That’s where AI comes into play. Take advantage of the financial AI tools available to you with the help of an AI consultant. Schedule a consultation today!