Data Analytics

The Benefits of Generative AI for Banking & Financial Leaders

Teresa Wingfield

October 10, 2023

Generative AI for Banking Finance

Generative AI is a subset of Artificial Intelligence (AI) that focuses on creating artificial data or content. It uses deep learning algorithms to generate images, videos, or audio based on the data given to it. Instead of learning from data, the benefits of generative AI includes creating brand-new data.

Generative AI is transforming data analytics in the financial services industry, presenting new opportunities to enhance customer service, increase revenue, improve security, reduce risks, optimize investments and strategic planning, and more.

Here are some common uses and benefits of generative AI in financial services:

Chatbots: Banks can use generative AI to create chatbots that mimic human conversation through text or voice interactions. Using chatbots can improve customer service, cut costs, and boost revenue.  For example, chatbots can save banks money by automating routine customer service functions such as answering questions about account balances and performing routine tasks such as making transfers and sending messages. More advanced uses include providing personalized recommendations and sales based on a customer’s history and activity.

Fraud Detection and Prevention: Generative AI is supplementing traditional fraud analytics with models that can identify abnormal patterns in large volumes of financial transactions so that financial institutions can halt suspicious transactions faster. Financial companies are also using generative AI to create synthetic data that simulates fraud so they can develop more robust fraud detection algorithms.

Anti-Money Laundering: Using generative AI to analyze large volumes of financial data such as transactions, accounts, customer profiles, and company information. Know Your Customer (KYC) data can identify patterns and anomalies that may indicate money laundering activities.

Credit Risk Assessment: Generative AI models can determine credit risk more accurately and much faster by analyzing vast amounts of data, including financial statements, credit scores, transaction histories, and other relevant data. This can lead to better lending decisions that reduce credit risk.

Credit Reporting: Companies in the financial services industry can use generative AI to automatically create credit reports and other financial documents. This can streamline loan application and approval processes, reducing paperwork and improving efficiency.

Algorithmic Trading: Traders can use generative AI to potentially achieve higher returns. Generative AI helps develop trading algorithms that produce trading signals for when to buy or sell a security and that predict market movements.

Portfolio Management: Generative AI can help optimize portfolio allocations by generating asset combinations and simulating their performance. Portfolio managers can use this information to build efficient portfolios based on criteria such as risk tolerance and return objectives.

Asset Management: Businesses can use generative AI to analyze market data and forecast asset prices, interest rates, and other economic trends. This information is valuable for making investment decisions and managing financial assets. Generative AI excels in analyzing unstructured data, such as social media sentiments and news articles to help investment managers gain insights into investor perceptions and market shifts.

Strategic Planning: A company in financial services can leverage generative AI to develop predictive models for financial metrics such as customer churn, account balances, and revenue. Better forecasts of these metrics can improve strategic planning and resource allocation.

Generative AI and the Actian Data Platform

Generative AI is a versatile tool that presents many opportunities for data analytics within the financial service industry. However, generative AI requires the right data platform to be successful. The Actian Data Platform is the first as-a-service solution to unify analytics, transactions, and integration. Its flexible cloud, on-premises, and hybrid cloud architecture brings you trusted, real-time insights, making it easier to get from data source to decision with confidence. The Actian platform’s low, no-code integration with data quality and transformation options make it easier and more flexible to address more generative AI needs/use cases.

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About Teresa Wingfield

Teresa Wingfield is Director of Product Marketing at Actian where she is responsible for communicating the unique value that the Actian Data Platform delivers, including proven data integration, data management and data analytics. She brings a 20-year track record of increasing revenue and awareness for analytics, security, and cloud solutions. Prior to Actian, Teresa managed product marketing at industry-leading companies such as Cisco, McAfee, and VMware.