Artificial intelligence is on its way to your bank. There are many benefits to consider with AI as it changes the way we think about finance. There could be more product personalization, lower fees, and more reliability in the trading algorithms for starters.

There are new product types and financial tools to consider using when the banking industry embraces machine learning and AI as well.

The impact of this technological evolution is already being felt on the stock markets around the world. How might it impact the average consumer at their local bank?

1. Technology will become more accessible.

The goal of artificial intelligence is to create intuitive experiences for users. This change is already present in the investment and banking apps that consumers use with their local banks. Platforms like Wealthfront offer more accessibility too. Look for AI to offer more ways to limit the influence of debt, improve credit scores, and create an improvement in investment returns.

2. Algorithms will continue to get better.

Asset management must combine accuracy, scale, and speed with human creativity to improve the consumer experience. Algorithms that focus on these traits will help people in a variety of ways. AI can incorporate more data into each decision. It could simulate how a new strategy would work in multiple ways. This process can also broaden the portfolio with more asset diversity without creating more time commitments or risk.

3. AI can lower the cost of banking.

Artificial intelligence will also change the banking industry because it reduces reliance on manual labor. This cost is the most significant expense in this sector. Thanks to the automation opportunities that exist in this area, consumers will eventually find that they can do more with their money for fewer fees.

4. It will equalize the investment playing field.

Algorithm-based trading has been around for several decades. The volatility that it creates is AI’s most significant weakness. Instead of noticing a selloff simultaneously that can lead to a flash crash, machine learning is helping to recognize moments more instinctively. Artificial intelligence in banking today avoids this issue proactively through proactive examination instead of being reactive.

5. There will be more personalization for the consumer.

When banks have enough data about a customer’s habits, it becomes possible to provide personalized products. Specific spending behaviors might lead to the recommendation of a particular loan type. These institutions could create custom mortgages, automobile loans, or person-specific interest rates and other terms.

What Changes Will AI Create in the Next Year?

As artificial intelligence becomes more accessible as a technology, consumers will receive better recommendations from their banks. It is a process that will lead to better asset management, enhanced personalization, and more accessibility to investment opportunities. 

The banking industry embraces the idea of AI because it makes them more productive and profitable. Customers will also benefit in ways that significantly impact their bottom line over time.

Instead of treating everyone the same, AI looks at individual needs. This change might seem simple at first, but it will have profoundly positive consequences in time.

Disclaimer:  The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.

About Deltec Bank

Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.

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