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Fintech apps and websites are very common today. Such apps allow us to access financial services from the convenience of our mobile devices, laptops, and computers.
A fintech app development company helps businesses put up apps and websites to deliver financial services. Fintech is a vast industry that includes digital investments, digital assets, digital payments, and neobanking.gp
Fintech is a contraction for financial technology. It is a quickly emerging segment that thrives on technologies like AI, blockchain, mobile app development to offer financial services digitally.
According to Statista, there are 5.62 billion fintech users globally as of 2023 generating revenue of $4.74 trillion:
The total number of fintech users and revenue generated is expected to reach 7 billion and $9.24 trillion, respectively by 2027. Consequently, there is an explosive growth expected in fintech app development services, and thus, the need to hire fintech app developers.
Artificial intelligence has several applications. It is also revolutionizing the way financial services are already delivered by means of mobile technology and the internet. Let’s discuss some of the major trends that will take place in the wake of AI implementation in fintech:
Although AI is helping out fintech businesses deliver banking and financial services, the abilities that it can impart to the fintech industry is great.
Artificial intelligence is already being implemented in many walks of life that ranges from healthcare and insurance to retail and manufacturing. AI models have the ability to learn from continuous streams of data and make better decisions.
For instance, an AI model can predict a patient’s future health costs based on their current healthcare status and thus, help the patient get tailored health insurance options.
Blockchain and AI are two of the biggest trends right now. However, they have greater significance when paired up. According to some sources, the global blockchain AI market will expand from $440 million in 2023 to $3.536 billion by 2032, growing at a super CAGR of 22.9%.
Both artificial intelligence and blockchain have their inherent advantages to offer. While blockchain offers high security and transparency, AI provides the ability to assist and automate intelligent decision-making.
As such, adding AI and blockchain to financial systems make them intelligent, highly secure, and more transparent.
The demand for ethical and explainable AI is growing simultaneously with AI and fintech. Already there is a huge stress on developing AI models that are accountable, transparent, and unbiased. This is important from business POV to build customer trust.
Regulatory technology a.k.a. RegTech is a mushrooming concept that pairs regulations with technology to enhance compliance with increasingly complex regulations in different business niches.
Although regtech has a wide scope for everything, it mainly applies to banking, communication, energy, and finance. AI not only facilitates easy compliance of specific rules, it speeds up the process of doing so.
Artificial intelligence can be used to automate redundant, time-consuming tasks and enable close monitoring of following regulations. Thus, AI has the ability to streamline regulatory compliance better than humans.
Although artificial intelligence has a huge potential to truly transform fintech, there are also many challenges that AI brings to the table.
Without building a comprehensive understanding of challenges imposed by implementing AI in fintech, optimum usage wouldn’t be possible. Therefore, let’s check out the 3 major challenges in adopting artificial intelligence in fintech:
As adding artificial intelligence to financial technology is still new, the investment required for it to happen is high. Therefore, a limited budget can affect implementing AI in fintech systems.
Thankfully, as the adoption of AI in fintech increases, better solutions will be developed at cheaper costs over time to help even small businesses to hop onboard. Nonetheless, at present, the idea of adding AI in small fintech businesses might not be a great idea.
According to Business Wire, observing the surge in integrating AI solutions, most banks and insurance companies are gearing towards better AI integration by 2025. This simply means more investment in adding AI capabilities to fintech products and services.
The concept of implementing AI in fintech is still new, therefore, there is a dearth of experienced professionals who can help doing so at the moment.
Lack of experience imposes risk on fintech companies failing to adopt AI in their business processes. Failing to add AI to their ecosystem, companies can waste resources without getting anything fruitful out of their endeavors.
As AI is new in business processes, organizations, at the moment, lack the experience of developing a proper framework to hire relevant AI talent.
AI is still a new concept. Although there is a surge in the adoption of artificial intelligence, it isn’t accepted wholly and solely. Complete adoption of AI in businesses is still a long path to tread.
There are people out there who prefer human interactions over interacting with an AI-powered chatbot or robot. Some people are even repellant to AI stating the risk that it can impose on humans if getting out of control.
Irrespective of having powerful chatbots that can engage in human-like conversations, there are several areas where these AI-spawned entities take a back seat.
At present, several people find human interactions more safe and reliable than AI-based conversations.
Fintech is a rapidly growing segment, and with the advent of artificial intelligence, it will become more accessible and functional for everyone.
There are several great opportunities brought to the table by introducing artificial intelligence into fintech systems. Hopefully, AI will help to build more efficient, innovative, reliable, and safe fintech solutions.
Apptunix is a reputed fintech app development company providing innovative solutions since 2013. We have a huge team of mobile app developers that can help you build your fintech solution from ground up.
Q: What are some advantages of adding AI to fintech systems?
A: Improved customer experience, enhanced fraud detection, personalized financial advice, better risk management, quick loan approval, and reduction in operational costs are some of the top benefits of implementing artificial intelligence in fintech apps and websites.
Q: What are some applications of AI in fintech app development?
A: Facial recognition for faster payments, better trading outcomes, and predictive modeling to maximize income are some applications of artificial intelligence in fintech app development services.
Q: What is the AI-first approach?
A: The AI-first approach lets businesses prioritize the use of artificial intelligence in their different operations that vary from customer support to risk management. With AI, fintech businesses can automate redundant tasks, make informed decisions, and learn better about customer behavior.