Over the last few years, Artificial Intelligence or AI in finance has emerged as a powerful disruptor. With most financial services companies already riding on the bandwagon, you should adapt to the changes induced by AI and related technologies.
 

The future of AI in finance is bright and has the potential to expand further. In another couple of years, AI in the finance industry is expected to completely redefine how companies interact with customers and provide their services.
 

Moreover, with the widespread adoption of cognitive abilities and AI, the financial services industry is set to experience a boost in its worldwide revenues. For your benefit, AI in finance will enable institutions to trim costs and improve their quality of services.
 

Here are some examples of AI in the finance space, where it is completely redefining the landscape:
 

• Improve customer centricity: Now, financial services industries are focusing on creating well-connected customer journeys with the help of AI and related technologies. An example of such usage of AI in the finance industry, particularly in a bank, can be seen when a customer walks into a bank, and an AI-enabled facial recognition system identifies and authorises the person without any need for physical assessment.
   

  Large amounts of life insurance data analysed by AI can help one understand the risk factors associated with a customer. This information can then be used to accurately price life insurance policies and to develop more tailored and personalised life insurance coverage options for individual customers.
   

  Moreover, AI in finance can also help to know customer spending habits and recent financial transactions. In many cases, AI can also help solve basic customer queries, enabling faster execution of services, quicker redressal of complaints and delivering personalised services. AI can also help banks assess the spending and usage of the customer credit cards and categorise them accordingly to pitch relevant services.
   

  Several financial institutions have already started using chatbots to deliver personalised interactions. The objective of leveraging AI in the finance industry is to provide customer-centric services so that the unique needs of each customer.
   

• Personalised wealth planning: The needs and demands of each consumer are different. With the help of AI in finance, personal wealth planning has revolutionised over the last few years. An example of AI in the finance space can be seen in the way specific wealth management services are being offered to the customer.
   

  For instance, if a customer wants to purchase a car and is looking for suggestions, the app can guide them about the type of outlay the car should have and what will be the finance requirements, along with loan approval limits as per the current income and expenditure of the customer. This service is further augmented by chatbots who act as customer service agents, serving customers throughout the day and on all days of the week.
   

  Today, chatbots have proven their efficiency in answering simple questions and redirecting the customers to the relevant resource. Moreover, chatbots have recently also become efficient in executing routine and basic operations such as opening or closing a bank account, account overview, fund transfer, cheque book issue and cancellation, etc.
   

  Even in the life insurance industry, AI can help customers with wealth planning by helping them identify suitable wealth creation and savings plans. AI can help insurance companies to identify investment opportunities, analyse market trends, and optimise their investment strategies. This can help to improve the overall performance of the insurance company's investment portfolio and to provide better returns to policyholders.
   

• Improved and efficient operations: AI in finance has enabled companies to bring more efficiency to their operations and effectively manage their costs. Today, financial institutions such as banks, finance companies, insurance firms, etc., can easily manage a lot of their cumbersome and complicated processes in minutes, whereas earlier, it took them hours to do so.
   

  For example, the processing of loans has become a matter of few steps, owing to the improvement in technology and AI. Moreover, machine learning algorithms further enable financial companies to suggest products and services to customers that perfectly fit their needs. This relieves the core team to focus on more important tasks, improving productivity.
   

  Life insurance companies can leverage AI to streamline their operations, reduce costs, and enhance customer service. By implementing AI, these companies can stay ahead of the curve and remain competitive in the market. AI algorithms can be used to automate the underwriting process, which includes evaluating the risks associated with each policy.
   

  By using AI, insurance companies can reduce the time and resources required for manual underwriting, thus making the process more efficient. Data can be analysed from multiple sources such as social media, medical records, and credit scores to assess risk accurately. This information can be used to improve underwriting and pricing policies.
   

  Moreover, AI-powered systems can be used to detect fraudulent claims and transactions in real-time, reducing the likelihood of insurance fraud and lowering claim processing costs.
   

• Risk management and fraud detection: Due to the increasing adoption of AI in the finance industry, companies are implementing machine-based learning methods to augment their security procedures.
   

  Today, surveillance and risk management have become a priority of financial services companies. This has become advantageous for both companies and customers. An example of AI in finance is the use of face enabled technology for accessing or authorising any debit and credit card transactions. Moreover, speech detection has enhanced security measures and authentication processes.
   

  Today, clients can access their banking services and making important financial transactions from their smartphones within a few clicks.
   

• Improved accuracy in predictions: A lot of financial services depend on making a reliable assessment of future trends. This is where the role of AI in finance comes into the picture. AI and machine learning algorithms process tons of historical data to find correlations between different patterns.
   

  Consequently, this helps financial services companies to assess an unfolding event and predict how the markets can move. This helps financial services companies provide insightful advice to their customers, enabling them to make the most of the market opportunities.
   

• Credit assessment: Lending is a critical business for most financial services companies. At its core, lending is a big data issue and involves several procedures. In such cases, AI in finance proves highly useful. Complex algorithms and AI induced mechanisms help lending institutions assess the creditworthiness of individuals and businesses seeking loans.
   

  AI technology helps accumulate data and then process it to provide insight into the creditworthiness of the customer. Further, AI in the finance industry helps lending institutions make coherent decisions regarding the collateral required for the loan after considering future inflation trend.
   

  Moreover, this is also helpful for insurance companies at the time of deciding the premiums for life insurance plans such as an income plan. AI helps the insurance firms analyse the policyholder and determine the level of risk associated.

  
   

What is the Application of Artificial Intelligence (AI) in Life Insurance?
 

The role of artificial intelligence (AI) is expanding rapidly across the life insurance industry. AI has been used to automate processes and reduce costs associated with customer service, including finding optimal premiums and targeting - the needs of the customers. AI can also be used to personalise customer service experiences and assess customer risk in real time. AI technology can provide insights into customer behaviour, enabling life insurance companies to identify and quickly respond to customer needs.
 

AI is also being used to create more effective marketing campaigns by analysing large data sets to accurately assess customer preferences and the most effective methods of reaching them. This helps insurers better understand their target audience and more accurately measure the effectiveness of their campaign. For example, AI can be used to predict customer churn and recommend appropriate product packages to prospects.
 

AI is also being used to improve customer service by automating customer support processes. AI-powered chatbots can provide relevant, accurate answers to customer inquiries, helping customers with basic information or questions without requiring time-consuming customer service interactions. By enhancing customer service and providing more accurate customer support, AI can help life insurance companies reduce costs and target customer satisfaction.
 

In addition to customer service and marketing, AI is being used to evaluate underwriting processes. AI can help life insurance providers to assess customer risk more accurately and better manage their claims processes. AI can also be used to analyse large data sets to detect fraud and provide insights into customer behaviour to help identify -customers’ needs.
 

Hence, artificial intelligence is helping life insurance companies reduce costs, personalise customer service, improve marketing campaigns, automate customer support processes, and evaluate customer risk. AI is also enabling life insurance providers to detect fraud and gain deeper customer insights. As AI technology continues to evolve, we can expect to see even more applications of AI in the life insurance industry.
 

The future of AI in finance
 

As companies continue to embrace AI in finance, the trend is expected to aggravate steeply shortly. As per reports, the strong near-term forecasts for growth of the financial services sector look highly promising. Today, the financial services sector is in a vantage position to unleash the power of AI in finance and benefit from its multiple disruptive advantages.

 

Conclusion
 

Overall, the future of AI in finance is undeniably bright and strong. With the world moving towards digitisation, it is highly beneficial for financial services companies to recognise the early symptoms of disruption and be prepared for the AI momentum.
 

If you want to invest in a life insurance income plan, you can consider the TATA AIA Life Insurance Value Income Plan that gives your family a secure future in your absence along with apt returns in the form of an income plan, enabling you to achieve your financial goals comfortably.
 

TATA AIA premium payments and life insurance income benefits are eligible for tax* benefits as per the applicable laws.
 

L&C/Advt/2023/Feb/0612