Financial AI to Look Out For
Artificial intelligence can help protect your wealth.
Fintech companies are those that leverage new technology used to create better and new financial services for consumers and businesses. “Fintech” is used to describe any kind of business that may work with personal wealth management, insurance, payment, asset management, and more.
There has been a recent shift for those looking to manage their finances that has drawn people to using technology to help them with the task. With this push, fintech startup companies directly help with traditional banking and financial institutions. In several countries around the globe, fintech companies are slowly taking over, providing services and products that were once found only through financial institutions.
Artificial intelligence is no longer a word associated with science fiction movies. It is very much real, with computers that learn and even develop personalities. There are so many uses for AI including personal companionship, the service industry, and even the financial industry. From investment management to finding investment opportunities and investing your money, artificial intelligence is gearing up to help you from beginning to end on your investment journey. As less traditional financial institutions, such as banks and insurance firms, are becoming less popular, the room for fintech and AI is increasing.
Why Artificial Intelligence is Taking Over
Why would we trust artificial intelligence to make important decisions with our money? Shouldn’t we trust real people with our wealth?
For one, AI has been implemented to increase security in various financial firms. Outdated security measures like anti-virus software are not getting the job done quite like it used to. Artificial intelligence security computers can learn by which means companies can improve security. AI can also analyze large volumes of security data, allowing for companies to grow without loss of security from fraudulent behaviors, suspicious transaction, and future threats.
AI has also sped up processing times. Processing financial documents, receipts, and other paperwork can be a time-consuming task that requires patience. AI can process the information quickly and accurately in a fraction of the time.
Other perks of AI in fintech include gathering data and insight for companies looking to get ahead, growing a small company by utilizing algorithms and automation that are affordable and accessible, and reducing duplicate expenses and human error.
Hedge Fund Management
There has been a new hedge fund management strategy that has emerged with recent technology. As computers become more necessary in quantitative hedge fund strategizing, some are relying solely on them. Artificial intelligence, or AI, is in the early stages of hedge fund managing.
Through machine learning, a diverse and growing field of artificial intelligence, algorithms have the capability to automatically learn from data and make predictions. This is an up-and-coming field and means a lot for not only the financial industry, but everything else as well. Artificial intelligence and machine learning are used to create systems that parse images and video, understand and translate text, and help diagnose medical illnesses. How can this be used to help with your financial planning?
As the technology and studies increase, so do the advancements, applications, and opportunities for AI. One such application, the one that will be covered here, is the use of AI for hedge fund management.
Machine learning algorithms analyze huge amounts of data creating their own rules based on patterns and connections they find between different points of data. The software updates itself automatically as they take in new data.
Some hedge funds are even using technologies that scan keywords in news articles to help predict any rise and fall in financial markets. As you know, any amount of risk can cause fluctuation. Having a computer that is able to use that information on trends and news to compute what kind of investments to make sounds like a radical idea, but it’s happening.
Blockchain and AI are the two technologies that are set to change the way we handle not only our finances, but many aspects of our daily lives. Imagine the two technologies working together.
Blockchain is the digital, public ledger where cryptocurrencies occur. Through a blockchain, everyone in the network can see every account balance. A blockchain is decentralized and is constantly growing with completed blocks. The most recent transaction is added in chronological order, which allows the blockchain participants to keep track of the transactions without central recordkeeping.
AI can help in many aspects of blockchains. First, mining will become an easier task within the blockchain that will require less energy.
Artificial intelligence will also increase privacy and security within the blockchains. Data on a blockchain is already highly secure because of the cryptography – but with AI, there will be an added level of high-security technology with algorithms that are capable of working with data that is still in an encrypted state.
With blockchains, we can also track decisions made by AI. This can reduce some of the worries that we may have concerning AI making decisions that humans can’t understand. AI can process large numbers or variables independent of each other and learn which are important. Blockchain allows these decisions to be tracked and audited when the decisions need to be understood.
It can be difficult to keep up with all of the work that goes into a hedge fund. Knowing that AI can be a significant help when it comes to your investments and financial goals, we couldn’t pass up the opportunity to get on board.
By partnering with a firm like Alpenrose that uses artificial intelligence with a built-in portfolio management system, you can stay up to date with the growing number of investment opportunities and make sure you are getting the most out of your hedge fund.