How Artificial Intelligence & Machine Learning is changing the finance industry


Thirunayan Dinesh

June 13 2020

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Recent years have seen a rapid acceleration in the pace of disruptive technologies, thanks to AI (artificial intelligence). The fintech industry, specifically, has seen a steep rise in the use cases of ML (machine learning) applications to advance better outcomes for both consumers and businesses.

Trends are poised to become industry standards, and there is a reinvigorated focus on consumer-friendly tech. Naturally, AI and ML are at the heart of this, and it comes as no surprise that the industry is predicted to be worth over $17,440 million with a CAGR of 17.9% by 2027. The only question is, how will companies use these tools to implement digital transformation and, more importantly, make it count?

How AI is Transforming Finance

Right from speeding up the underwriting process, portfolio composition, optimization, model validation, and market impact analysis to offering alternative credit reporting methods, the different use cases of Artificial Intelligence and Machine Learning are having a significant impact on the financial sector.

The finance industry, including banks, trading, and fintech firms, are rapidly deploying machine algorithms to automate time-consuming, mundane processes, and offering a far more streamlined and personalized customer experience.

Conversational AI Enhances Client Engagement

Alongside knowing what your customers want is communicating with them. Nowadays, consumers expect response times to be faster and more convenient for them, with 24/7 communication becoming the new normal for many. However, for many businesses, ensuring round-the-clock communications is almost impossible, and this is where conversation AI comes in.

With an estimated 3,150% growth rate in terms of successful chatbot interactions between 2019 and 2023 and an estimated 862 million hours saved for businesses in the future, it’s clear that chatbots will continue to impact how business communication is done in the future. Conversational AI is transforming chatbots from a stopgap in consumer communications to a genuinely useful tool to help consumers.

At Rootcode AI, our team built “ConverseUp” - an intelligent conversational AI assistant that can help e-commerce users with their inquiries, suggest products, and resolve questions about products, reducing the response time to customers from hours to seconds, providing an overall superior customer support experience.

Analyzing Data with AI

The core offering of any AI solution rests in its ability to methodically analyze data and generate relevant insights that are otherwise invisible to the human eye. AI remains unperturbed by changes and manages to recognize patterns, analyze cash flows, flag suspicious activities, and detect fraud. As a result, businesses can use it for various applications ranging from budgeting to transaction validation to credit scoring and more.

Another way AI helps in analyzing different asset classes is by providing sentiment analysis, which is helpful for investors interested in investing in stocks with improving sentiment.

Forecasting with AI

Forecasting has proven to be a highly sought-after quality throughout the financial and public administrations market, and AI makes it possible with its data-driven approach. Predictive analysis finds widespread applications across different verticals, ranging from predicting customer behavior to forecasting project spends.

For instance, AI is used to make revenue projections, which is especially helpful for investors who are investing based on earnings announcements.

Planning with AI

While analysis is oriented to the present conditions, forecasting helps with future predictions, and planning acts as a bridge that aligns the two states. AI can help companies and individuals draw a practical road map that connects their current state to their future aspirations.

For example, an exposure analysis tool can generate a list of assets that are susceptible to certain market exposures, helping investors in planning their portfolios.


The Fintech industry is a hotspot for AI-led technological innovation. Companies can deploy AI solutions to explore various drivers for their business, create accurate forecasts, enhance real-time decision-making, and improve ROI.