Generative AI is one of the emerging technologies the finance industry is leveraging to streamline its operations, enhance customer experience, and drive innovation.
Leading finance institutions, such as Goldman Sachs, Morgan Stanley, Fidelity Investments, and JP Morgan are embracing genAI for creating error-free financial reports, empowering virtual assistants to provide enhanced customer experience, and more.
In this blog, we have explained 10+ real-life uses of generative AI and listed top leaders using it to transform the finance sector.
But before you read about the use cases, go through some of the latest market statistics about generative AI’s impact on the finance sector.
Generative AI in Finance: Latest Market Statistics
Following are the statistics showcasing how generative AI is impacting the financial sector.
Source: Precedence Research
- The global generative AI in banking and finance market size is projected to be approximately $12.33 billion by 2032, growing at a CAGR of 33% during the forecast period from 2023 to 2032.
- Studies show that the banking industry could increase by $340 billion with the use result of Generative AI.
- IBM’s study reveals that 57% of BFM (banking and finance market) CEOs believe that having the most sophisticated generative AI will give them a competitive advantage in the sector.
- As per reports from the EY, 78% of surveyed financial institutions are implementing or planning to integrate generative AI into the business.
- The generative AI market is projected to be led by North America with a share of 34.4%, followed by Asia Pacific (33.1%), and Western Europe (17.2%).
Read further to learn about the uses of generative artificial intelligence (GenAI) in the financial industry.
Top Generative AI Uses in the Finance Sector
Leading financial institutions leverage generative AI technology in apps, software, and other digital solutions for various purposes. Below are enlisted the top uses of genAI in finance.
- Streamlines Accounting and Financial Reporting
The first use of generative AI in finance is that it helps with creating financial reports and streamlining accounting processes. The genAI algorithms trained with past data automate the accounting process and help finance experts create human-like financial reports.
The generative AI models minimize the required human efforts and reduce the chances of errors.
- Helps in Fraud Detection
Generative AI helps financial businesses like banks and financial institutions in detecting and preventing fraud. Generative AI models leverage machine learning to identify unusual patterns, for example, unauthorized access into the database, which can turn out to be a potential fraud.
GenAI detects these patterns and alerts about them in real-time, reducing fraudulent activities in the finance sector.
- Implementing Algorithmic Trading Strategies
Algorithmic trading, also known as algo-trading, is a type of trading in which traders use computer algorithms to execute trades automatically. Generative AI helps in creating these algorithms and strategies using market data and trends.
Moreover, GenAI makes it easy for traders to implement algorithmic trading strategies in real-time to execute trades and enhance trading performance.
- Simplifies Portfolio Management
The genAI models help financial experts to manage the portfolios of their clients. Clients diversify their investments, portfolio management becomes difficult and time-consuming.
Generative AI, on the other hand, accesses the investments and manages them accordingly, saving time and manual effort. The GenAI models leverage enhanced algorithms to simplify portfolio management with greater accuracy.
- Credit Risk Assessment
Banks and financial institutions use generative AI to analyze client’s history to assess the involved credit risk.
The GenAI models leverage machine learning capabilities to access details like clients’ past loans and repayments to verify their credibility.
It analyzes the data (financial information) and summarizes it to help finance experts make informed decisions for approving loans and other credits.
- Empowering Chatbots
Another use of generative AI in the finance sector is empowering chatbots to address customer grievances and deliver solutions in real-time around the clock.
Financial institutions empower chatbots with generative AI, enabling them to understand customer feedback or complaints using machine learning and sentiment analysis.
After understanding, these chatbots give real-time responses to customer queries.
- Personalized Finance Advice
Apart from addressing customer queries and complaints, generative AI-powered chatbots are also used to offer financial pieces of advice tailored to their specific financial goals.
Generative AI collects customer data, such as age, income, goal, and time to achieve those goals, evaluates it using the algorithms it is trained on, and gives advice that helps customers achieve their personal financial goals.
- Market Analysis and Prediction
Stockbrokers and traders use generative AI for market analysis and accurately predict the movements to enhance their profits.
The generative AI models learn from past market information, such as market movements, prices of shares, growth or fall in the shares, etc., and provide crucial insights that help traders predict accurate market movements and make money.
- Due Diligence for Mergers and Acquisitions
Generative AI helps investment bankers and M&A analysts with due diligence; evaluating businesses and their financial performance, for mergers and acquisitions.
The Generative AI, trained on vast data, summarizes the business’s history and financial records that help analysts and investors make informed investment decisions.
- Simplifies Tax Law Amendments
Generative AI models in finance are also used by tax experts to analyze tax laws, rules and regulations, and financial data, allowing them to amend existing taxation laws to benefit businesses and customers alike.
- Marketing in Finance
Last but not least, generative AI is used by marketing teams in financial institutions to promote the business and its products and services.
Generative AI helps with creating engaging content, images, audio, and videos that are used for creating marketing materials, enhancing creativity, and saving time for the marketing team.
Therefore, these are the top real-world uses of Generative AI in the finance industry.
Read further to learn about leading banks and financial institutions using generative artificial intelligence to enhance productivity, automate processes, and save time.
Generative AI: The Top Choice for Leading Banks and Financial Institutions
Generative Artificial intelligence is popular in the financial sector. Key players in the finance industry worldwide use generative AI for the purposes we discussed above.
Here are some of the leading financial institutions that leverage generative AI in their daily operations:
- JPMorgan Chase
Source: New York Times
JPMorgan Chase is one of the leading financial institutions that uses generative AI in chatbots, enhancing its customer services. Moreover, it also uses the technology to detect and prevent potential cases.
- Goldman Sachs
Source: Global Finance Magazine
Goldman Sachs, a leading global financial institution, uses generative artificial intelligence to create and optimize trading strategies. Furthermore, finance analysts leverage genAI to conduct complex financial analyses and create reports.
- Bank of America
Source: Fox Business
Bank of America, a leading bank in the USA, has developed a generative AI-powered virtual assistant, known as Erica. The virtual assistant provides personalized financial advice and customer support to the bank’s clients.
- Wells Fargo
Source: Forbes
Wells Fargo is one of the best financial services companies in the world. The company embraces generative AI for risk management and streamlining loan underwriting processes for making informed decisions for approving loans.
- Morgan Stanley
Source: Morgan Stanley
Morgan Stanley is a leading investment banking company that uses generative AI to offer personalized wealth management services to their clients worldwide.
It also leverages generative AI to provide advanced financial modeling and predict the impact of a future event or decisions made by the management.
Hence, these are some top finance players that are using generative AI in their daily operations.
Conclusion
Generative AI is creating its space in the finance industry, and it will stay here for a long time ahead.
Leading financial institutions have already started using genAI for various finance operations ranging from streamlining accounting and financial reporting and fraud detection to simplifying tax law amendments and marketing.
If you also want to benefit your business using generative AI, reach out to Quytech, a leading generative AI development company, that has years of experience in developing digital solutions powered by generative AI.
For more details, please visit our website: www.quytech.com
Frequently Asked Questions
Here are some FAQs regarding generative AI’s use in the finance sector.
Generative AI is used in the finance industry in the following ways:
– Streamlining accounting and financial reporting
– Fraud detection
– Implementing algorithmic trading strategies
– Simplifying portfolio management
– Credit risk assessment
– Empowering virtual assistants
– Offering personalized finance advice
– Market analysis and prediction
– Due diligence for mergers and acquisitions
– Simplifying tax law amendments
– Marketing in finance
Yes, you can share your requirements with our team and we will assist you in developing a generative AI solution tailored to your specific needs.
The cost of developing a virtual assistant powered by generative AI depends on various factors, such as the type of virtual assistant, the genAI model used in it, the development team, and more.
Therefore, we advise you to share your requirements with our experts to know the development cost.