Artificial Intelligence 1

Running Head: ARTIFICAL INTELLIGENCE

Artificial Intelligence to Improve the Financial Institution Services

[Name of the Writer]

[Name of the Institution]

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Table of Content

Artificial Intelligence in Finance ............................................................................................... 3

Evolution of AI in Finance ........................................................................................................ 3
Conclusion ................................................................................................................................. 5
References .................................................................................................................................. 6
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Artificial Intelligence to Improve the Financial Institution Services

Artificial Intelligence in Finance

The word artificial intelligence was introduced by John McCarthy in 1957. He

described artificial intelligence as a computer system that can perform functions like human

and capable to perform a task which are connected with intelligent beings (Luo et al., 2018).

After knowing the importance of AI, many financial organizations have started using it in

order to reduce cost, add value, and save time. For instance, financial

organisationsorganizations used are using robot- advisor because it helps the company to

manage theirautomate their portfolio management and give digitally calculated financial

adviseadvices which is are based on algorithms and mathematical rules and have least

chances of errors (Riikkinen et al., 2018). Moreover, many financial organisations use image

recognition software for the purpose of analyzing legal document extract important data from

it. Emerging AI technology heavily influenced the future of finance as it helps financial

services companies to decrease their risk, minimize resources and increase more revenue

through investing in banking and trading.

Evolution of AI in Finance

Artificial Intelligence brings evolutionbrought advancement in the field of finance. In

the 1950s, financial institutions were showwned so much excitement over AI because it could

help them tothey found it helpful in terms of speeding up their work and calculate calculating

the complex mathematical problem without any error an efficiency which is was not possible

by humans in a short time period (Russell and Norvig, 2016). In addition to this, financial

institutions are were the first sector who shows showed their interest in using AI in finance.

Bayesian Statistics brought so much change in finance and helped finance managers to Formatted: Highlight

predict the stock market and also help in auditing (Steels and Brooks, 2018). This application
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was widely famous in the 1960s because it helps the financial institution to make informed

decisions founded on probabilities and introduced statistics in finance. Not only this, the

financial institution can detect frauds and money laundering by using AI, such as , FinCEN

Artificial Intelligence System (FAIS) has been used in this regard (Luo et aL., 2018). It is the

combination of different AI technologies and it is able to analyse a large amount of data in a

short time period. More importantly, this application has an ability to read handwritten

transactions which easily trace the discrepancies and fraud.

Many financial institutions have been used AI because it brings a lot of changes in

banking, insurance and finance (Steels and Brooks, 2018). There is much application of AI,

such as, financial institutions can manage documents through AI, reduce friction by

improving decision making processes and workflows, prevent from fraud. In addition to this,

the AI-powered model has been used for the assessment of a client’s credit risk as insurance

companies offer underwriting services to other organisations (Riikkinen et al., 2018).

Different AI methodologies have been used in finance in order to improve the financial

system of KSA which include:

 Risk Management

 AI Trading

 Robo -Advisory

 Chatbots used for customer service

 Contract Analyzer

Risk can be managed through AI because it provides accurate mathematical

calculations to accountants. A model market-maker has been used for short-term trade which

is based on the fluctuation of the price movement (Russell and Norvig, 2016). Moreover, the

financial manager can take advise from the robot-advisor report for the purpose of decision

making. The financial institution also uses Chatbot method for its customer service as it
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automatically generates text messages and audio message to its customers and creates better

communication between company and customers (Luo et al., 2018). All of these methods

help the financial institutions to improve their services and also save their time and money. It

also encourages KSA institutions to proceed with further development in the field of AL

related to finance.

Conclusion

Artificial Intelligence put a remarkable impact in the field of finance. It helps

managers to operate company activities efficiently. It is possible through using different

methodologies and these methodologies help institutions improve their operational activities
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References

Dunis, C.L., Middleton, P.W., Karathanasopolous, A. and Theofilatos, K. eds.,

2016. Artificial Intelligence in Financial Markets: Cutting Edge Applications for Risk

Management, Portfolio Optimization and Economics. Springer.

Luo, J., Hu, Z. and Wang, L., 2018, June. Research on CPA Auditing Reform Strategy Under

the Background of Artificial Intelligence. In 2018 2nd International Conference on

Management, Education and Social Science (ICMESS 2018). Atlantis Press.

Riikkinen, M., Saarijärvi, H., Sarlin, P. and Lähteenmäki, I., 2018. Using artificial

intelligence to create value in insurance. International Journal of Bank

Marketing, 36(6), pp.1145-1168.

Russell, S.J. and Norvig, P., 2016. Artificial intelligence: a modern approach. Malaysia;

Pearson Education Limited.

Steels, L. and Brooks, R., 2018. The artificial life route to artificial intelligence: Building

embodied, situated agents. Routledge.