AI is shaking up how we make money decisions. It's like having a super-smart assistant that's changing the way things function in finance. In the past, we mostly trusted on our gut feelings, but now, AI algorithms are holding trust factor and changing the financial world. These impressive methods are made to handle huge amounts of data, find patterns, and predict what might happen next. This gives us way better outlook over the traditional methods. Whether it's figuring out where to invest or managing risks, AI is like a protector, streamlining financial decision-making more effectively and accurately.

In simple terms, AI is like the advance form an old map to a GPS – it supports us to navigate the complex world of finance with extra speed and accuracy. It's not just a tech thing; it's a game-changer, making money decisions smarter and more reliable.

Why AI in Finance Matters?

Now, let's talk about why AI in finance is a big deal. In today's world, things are more complex, and AI is like a secret weapon. As the markets get all mixed up and linked, being able to quickly understand info, making smart decisions seems difficult. Here's when AI shines – it's like having a super-smart helper for banks and wealthy populace. It helps them to deal with the problematic parts, making things better, safer, and overall more remarkable. Identifying how big of a deal AI is in this position isn't just about impressive tech; it's like having a smart strategy to keep up and do well in the always-advancing money world. So, understanding and embracing AI in finance isn't just a tech thing; it's like having a smart game plan handy to stay ahead in the ever-evolving world of money decisions.

This theory surfaced when the IoT swamped the markets, and now we're in the AI phase. It's like a big digital race for the financial companies. It's breaking the old rules and making room for new ideas and better ways of doing things. Think of it as a big shake-up, weakening the old connections in traditional finance and making space for new innovations and different ways of running things. It's all about making smart machines that can do things just like humans. These machines are like fast learners – they can communicate themselves, sort out information, and make estimates. Now, the way they offer us products and services seems like getting a high-tech makeover. It's like having super-smart helpers making everything better and more advanced. So, AI isn't just a tech device; it's the intellect behind scheduled scenes, creating a smarter and safer world for money.

S Ravi, Founder & Managing Partner, Ravi Rajan & Co, says, “AI has introduced sophisticated financial planning tools that leverage algorithms to create personalized financial plans ".

AI Revolution in Finance

In banking, AI does tasks faster, like approving credit and protecting against fraud. It helps banks be secure and follow rules. Banks use AI to quickly look at lots of data, find trends, and predict the future. Investors use it to understand the market and risks. In insurance, AI uses personal data to decide coverage and prices. It's also vital for stopping fake transactions by comparing what's happening now to the past. For customers, AI makes banking better. It does tasks like payments and transfers automatically. Online banking is safer with AI, and you don't need to go in person. AI helps quickly with credit card or loan applications and warns about suspicious transactions. Overall, AI makes banking easier and safer for everyone.

What's New in Finance?

As we step into 2024, the financial world is active with changes and challenges. With the tech world growing, the financial services industry is in for some major shifts. While concerns about high-interest rates and inflation continue, there's a lot more to watch out for. One huge thing to look at is the increase of new technologies like automation. Even though the effect of the COVID-19 pandemic is reducing, the way we work in finance is still a mix of remote and in-person setups. Organizations are putting efforts into both to adapt to this hybrid style. Interestingly, it took some spotlight away from cryptocurrencies. Crypto is creating a comeback in 2024. The change to online banking and handling resources digitally has given cryptocurrencies and blockchain a new chance in the spotlight.

Cryptocurrency is like digital money that doesn't need banks to check if transactions are okay. It works from person to person, allowing anyone, anywhere to send and get payments. Instead of physical money, it's all online, recorded in a digital database. When you send cryptocurrency, it's noted in an open list, and you save it in a digital wallet. The name ‘cryptocurrency’ comes from the mode it uses special codes to make sure transactions are safe. It's like having a secret language for keeping things secure. The first-ever cryptocurrency was Bitcoin, starting this whole digital money idea.

Bitcoin is like a special kind of money that doesn't need a big bank or other people to say it's real. It uses something called blockchain, which is like a public record showing every time someone uses Bitcoin. This record helps prove that someone really has the Bitcoin they want to spend and stops bad things like cheating or stealing. This part is because it's not controlled by one big bank; sending money to someone in another country is quicker and cheaper compared to using regular money services. So, Bitcoin is kind of like digital money that works on its own without needing big services.

Anoop Gala, Global Head Financial Services, Orion Innovation, says ,"AI algorithms can help banks and other financial institutions to detect fraud and reduce risk. Blockchain technology can provide a secure and transparent way to conduct financial transactions without the need for intermediaries".

Blockchain is a technology that helps keep records and is used in many areas because the internet is getting smarter. But, using Blockchain also brings some problems we need to solve. This looked into these problems and sorted them into three types: technical problems, like making sure it works well and is safe; operational problems, like when people make mistakes or try to do bad things; and legal problems, like not having the right laws. To fix these problems, some ideas are suggested, like using new technologies, making things work better, trssaining people, and creating new laws. The goal is to make Blockchain safer and more reliable. It also suggests more research in the future, especially on making financial rules stronger and exploring digital money controlled by central banks.

Open banking is additional term to keep an eye on. It's about giving safe access to your financial data, and customers are looking for control over who gets that access. APIs, the tech behind the scenes, might become the go-to way for banks to connect and make things smoother. Now, let's explore about the cybersecurity. With all these tech advancements, the risks are growing too. Cyber threats are getting trickier, and it's essential for banks to invest in tools and systems to fight them. Also, watch out for more efforts in fraud detection, especially with the rise of generative AI in financial institutions.

Looking ahead, the financial world needs to keep studying and improving rules to make them stronger. Exploring new ideas, like digital money controlled by central banks, is also important. As we adapt to the changing financial world, AI keeps leading the way.