Banking AI
March 5, 2024

8 AI Trends in Fintech [2024]

Trying to find some of the best trends in fintech you can jump on? Check out how AI is changing the fintech industry to get ideas!
8 AI Trends in Fintech [2024]

Finance is one of the forward-looking industries where companies should and do take advantage of the latest tech trends. 

Currently, more and more companies are turning to AI to automate financial processes, meet growing customer demands, and keep up with competitors.

AI models are helping financial institutions streamline tasks, improve efficiency, and reduce manual labor, so it’s no surprise that they’re taking over fintech as well. AI is becoming a ‘must-have’ for contemporary financial technology.

With that said, here are the 8 best AI-powered fintech solutions and trends today.

8 Latest AI Trends in Fintech

AI is a great way to improve financial management without needing extra people in the office. However, AI can offer much more than that.

It can make financial predictions and assessments by learning from company data, or even help prevent fraudulent activities. These AI trends in fintech are not only revolutionizing the way the fintech industry works but are also bringing a much better and faster user experience.

AI trends in fintech

1. Automated and Personalized Financial Advice

AI-powered robo-advisors are a big thing in the financial sector. They’re at the point where they’re sophisticated enough to automatically make personalized offers and advice by analyzing customer and financial data. 

These offers and advice can be based on customers’ financial needs, current financial situation, risk tolerance, and goals, as well as current market conditions and company guidelines.

However, off-the-shelf AI usually isn’t good enough to undertake such a big responsibility. Customized AI Agents, like Conversational AI, that are trained on company-specific data and workflows are a much better choice for this purpose.

Such AI has a much deeper understanding of the financial industry as a whole as well as the specific needs and preferences of individual companies.

Benefits:

  • Improved customer experience (faster answers and solutions to their problems)
  • Improved in-house efficiency
  • Potential for automated sales
  • Better personal financial management

2. Preventing and Detecting Fraud

Certain fintech companies are employing custom AI models with the sole purpose of detecting and preventing fraud. 

Large language models can learn from the data and analyze patterns. Whenever something is out of order – i.e., whenever AI detects anomalies or discrepancies in data – this piece of data is flagged and sent to the financial advisor for review.

AI mitigates risk by quickly analyzing huge amounts of data that humans simply can’t handle, at least not on such short timeframes.

Additionally, AI continues to learn and grow as it analyzes data. This makes it much more efficient, and most importantly, a lot more accurate. Besides protecting customers, it can potentially help finance companies save thousands of dollars that could potentially be lost to fraud.

Benefits:

  • Quicker fraud detection
  • Improved customer protection
  • No risk of human error

3. Combining Blockchain with AI

Combined blockchain with AI

Fintech companies aren’t only improving existing processes but also innovating with the help of AI to remain competitive. By combining blockchain with AI, the fintech industry can be more transparent, secure, and efficient when it comes to financial transactions.

The blockchain ledger is secure, so the AI introduction to blockchain improves the analytical power and brings more AI services that fintech companies can rely on. 

The best examples of these AI blockchain services include the introduction of smart contracts, improved security measures, new ways of identity verification, and decentralized finance platforms.

Such a combination of blockchain technology and artificial intelligence improves the fintech services and leads to a much better infrastructure. Most importantly, it increases trust in the infrastructure and system and can even help prevent a global financial crisis in the future

Benefits:

  • Improved security
  • More transparency 
  • Increased customer trust

4. Improving Predictive Analytics for Credit Scoring

AI also gives fintech companies more ways to analyze additional data to calculate credit scores. 

This can help customers with no credit score history or very little data for analysis finally access certain, previously unattainable financial services.

AI can now analyze and learn from data that previously wasn’t used to calculate creditworthiness. This can include bill and rent payments, or even social media information. 

AI is fully capable of making assessments, including risk potential, to calculate the credit score much faster and more accurately than traditional solutions.

When financial institutions use AI for such purposes, they can not only improve operational efficiency but also create new, tailored services and products for a bigger customer base. This gives customers a wider range of financial services to choose from, while fintech companies benefit from new revenue streams.

Benefits:

  • Much accurate credit score analysis
  • Faster and safer risk management
  • Ability to generate new revenue streams

5. Enhancing Security With Voice and Biometrics

Enhanced biometrics security options

Artificial intelligence is also useful in protecting users and user data through new ways of authentication. 

The first and foremost benefit is identity verification where biometrics replace traditional methods like passwords and PINs. This provides a much more accurate way of verifying the identity before gaining access to sensitive data.

Transaction authorization is another way to protect digital assets for customers by adding an extra layer of security to each financial transaction. The best examples of enhanced AI security include fingertip and facial recognition models. 

Some fintech companies go even further by employing advanced security measures such as iris recognition and behavioral biometrics.

These AI-enhanced security measures help detect fraud in real time and block unauthorized access. At the same time, the financial services industry has a much easier way to comply with the KYC and KYB regulations.

Benefits:

  • Better data and account security
  • Safer transaction authorization process
  • Real-time fraud prevention

6. Predictive Banking

One of the most advanced and the latest fintech trends is predictive banking. With the help of machine learning and AI models that can analyze huge amounts of data and customer behavior, personalized banking industry services are taken to the next level.

Upon learning from the data, AI models can make customer-based predictions, including behavior and financial needs. AI models analyze data such as previous transactions, digital footprints (including social media), and other data sources to make personalized predictions that can help provide better advice for each customer. 

The AI technology goes so far to the point it can predict big financial events for fintech customers, such as buying a house or a need for a loan.

Benefits:

  • Better predictions on customers’ needs
  • Personalized advice for each customer
  • New channels to offer financial solutions

7. Enhanced Customer Service and Engagement

Improved customer service

Artificial intelligence is changing the way fintech companies provide customer service and engage with customers. The improvements started with AI-powered bots and virtual assistants. It didn’t take long for these to start handling more complex data to manage harder customer service queries.

AI Agents with advanced natural language processing (NLP) capabilities, like Conversational AI, can respond to queries with understanding and even empathy, making the support indistinguishable from human support. 

With these models providing support 24/7 and handling multiple queries simultaneously, they can also use previous predictions to predict requests they might need to solve.

All of these capabilities turn previous simple chatbots into advanced agents that can analyze and act on data in real time. This allows them to tailor their responses and product suggestions, as well as improve customer engagement and trust using advanced communication. Third-party users who use embedded finance services can greatly benefit from such excellent customer support.

Benefits:

  • Ability to understand queries and respond much more accurately
  • 24/7 customer support
  • Ability to analyze data and provide tailored responses to customers

8. Complying with Regulations

One thing financial institutions might struggle with is regulatory compliance. With fintech global trends on the rise, complying with regulations is becoming a lot more difficult. Luckily, that’s also one of the things a fintech company can take care of with the help of AI.

Legal standards are constantly changing. AI models that are custom trained to understand this type of data can keep up with the regulatory changes, at a much faster pace than a human. 

Some of the best examples include automated monitoring and reporting, where AI models scan regulatory data and can even ensure adherence to regulations.

While this information is preferably double-checked by a human, AI can help reduce errors and reduce the amount of allocated resources needed to stay regulated. 

Benefits:

  • Easier way to stay within the legal standards
  • Better way to notice regulatory changes

Transform Your Business With Finance AI

We’re witnessing how AI is transforming the fintech industry at an unprecedented pace. It’s not only helping streamline and automate processes, but it’s also benefiting everyone in the fintech industry at a larger scale.

Improved security, personalized banking services, enhanced customer experience, and automated advisors are just some examples of how AI is already deeply integrated in this sector. With these trends evolving, financial services are becoming much more secure, accessible, and efficient for everyone.

If you’d like to capitalize on the same benefits, please schedule a 30-minute call with our experts. You can discuss the best use cases for your business, see how our AI Agents work live, and get answers to any AI-related questions you may have. 

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