Businesses gather thousands of data points, but the usefulness of this data can only be unlocked when it is presented in a manner that offers actionable insights. According to Forrester, between 60 and 73 percent of all data within an enterprise goes unused for analytics. This means that many SMEs are missing out on valuable insights that could help them improve their financial situation.
Imagine giving a human the task of sorting business data,– that means spending most of the time sifting through data of little value. Once manual input is taken out of the equation, artificial intelligence (AI) and machine learning (ML) can be used to fill in the gaps. These technologies have been used to revolutionise the way businesses operate, and the banking and accounting industry is no exception.
Areas where AI can help
Credit Decisions
With AI and ML, banks can assess a much broader range of data, including spending habits, to gain a more comprehensive view of a customer’s financial behaviour. This allows banks to assess the creditworthiness more accurately and provide personalised products that better meet the needs of their customers.
One of the most significant benefits of AI-powered credit scoring algorithms is that they can account for a much wider range of factors than traditional credit scores. Typically, these factors are considered when judging the credit score of a business:
- Payment history and behaviour
- Debt level and utilisation ratio
- Business age and size
- Industry and market conditions
- Financial statements and cash flow
These algorithms can offer a much more accurate assessment of an organisation’s creditworthiness. This level of detail can help banks minimize their risk and make better lending decisions.
But the benefits of AI and ML in credit decision-making aren’t just limited to banks. Customers can also benefit from this technology. By providing a more accurate assessment of creditworthiness, banks can offer customers better access to credit. This means that people who may have previously been denied credit based on their credit score alone may now be able to access the credit they need.
Financial Risk Management
Cyberattacks, fraud, and money laundering pose a significant threat to the financial sector. To mitigate these risks, banks need to be vigilant in detecting and preventing fraudulent activity. This is where AI and ML come in handy. By analysing large amounts of data, these technologies can identify patterns that may detect fraudulent behaviour, enabling banks to act proactively.
Machine learning algorithms can also help banks identify potential risks by analysing historical data and predicting future trends. By automating risk management processes, banks can save valuable time and resources while improving their ability to detect and manage risks.
But the benefits of AI and ML in financial risk management aren’t limited to banks alone. Businesses across industries can leverage these technologies to improve their risk management processes and make more informed decisions. For example, a company that deals with large amounts of sensitive customer data can use AI and ML to detect and prevent cyber threats, safeguarding its customers’ privacy and reputation.
Customer Service
People expect 24/7 access to company helplines these days, and AI provides the facilities for that to happen. These technologies can provide banks with services that help customers with their financial needs, or any queries they may have. Here are the main ones you need to know about:
- A chatbot is a computer program that uses artificial intelligence (AI) and natural language processing (NLP) to understand customer questions and automate responses to them, simulating human conversation. Chatbots can be used for a variety of tasks, like getting information about products and services, creating surveys and gathering feedback
- A voice assistant is a type of chatbot that uses speech recognition and synthesis to interact with users through voice commands. Voice assistants can perform tasks such as playing music, checking the weather, booking appointments, ordering food, controlling smart devices, etc. Some examples of voice assistants are Siri, Alexa, Google Assistant and Cortana.
- A robo-advisor is a type of chatbot that uses algorithms and data analysis to provide financial advice and investment management to users. Robo-advisors can help users create personaliszed portfolios based on their risk profiles, goals and preferences. They can also monitor market trends and adjust portfolios accordingly.
By providing these services, lenders can not only improve their customer service but also reduce their costs. Automated services can handle a large volume of customer inquiries simultaneously, reducing the need for human customer service representatives. Customers can enjoy faster service and 24/7 availability, thanks to this solution that improves efficiency for lenders.
What’s more, OpenAI could enable chatbots to level up and become even more useful. Towards the end of 2022, ChatGPT took the world by storm by being a chatbot capable of generating realistic and engaging conversations on any topic. OpenAI released the ChatGPT API in March 2023, allowing any individual or organisation to integrate its capabilities into their own services. It is only a matter of time before chatbots become even more intelligent and make better use of business data.
Data Analytics
Finally, accountants can analyse large amounts of data faster and more accurately by leveraging AI and ML. As a result, accountants can now spend less time on manual data entry and more time on analysing data to identify trends and insights that can help drive better business decisions. What’s even more exciting is that AI and ML algorithms can identify patterns in financial data that may not be immediately apparent to humans, resulting in more accurate and reliable financial reports.
One product that leverages intelligent automation to provide useful banking and accounting information for small and medium-sized enterprises (SMEs) is Pulse. This innovative solution connects to your accounting software and bank accounts to provide a comprehensive view of your business finances. With AI-generated insight reports, Pulse highlights your business’s strengths, weaknesses, opportunities, and threats based on your open banking and open accounting data.
Pulse’s interactive dashboards and graphs allow you to monitor your cash flow, profitability, liquidity, and solvency. The solution also allows you to identify any potential issues or risks in your business finances and suggests actions to mitigate them.
Pulse is easy to use, scalable and secure! You don’t need any coding skills or technical expertise to get started. You can even integrate Pulse with your existing systems and data sources seamlessly. Try Pulse today!
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