The financial sector is full of millions upon millions of numbers. And while humans have been pretty good at analyzing these numbers, many of them have made miscalculations and misjudgments in the past when it comes to personal finance. But now, with the rising surge of artificial intelligence programs, these mistakes may be able to be minimized. That is why the following list of three ways in which artificial intelligence is changing finance has been created. The changes, in no particular order, are as follows:
- Large Data Set Analysis
- Improved Forecasting Models
- Better Identifying Consumer Trends
Large Data Set Analysis
One of the biggest constraints put on humans is time. They have no means of creating more of it and are subject to its continuous ticking. If someone in the finance industry were to attempt to digest every metric necessary to have a perfect outlook on the industry, they would never be able to eat, sleep or enjoy life. Now, thanks to artificial intelligence, large data sets that would take a human days to complete can be analyzed in a matter of seconds. This allows quicker response times and more accurate information in a sector where things a drastically change overnight.
Improved Forecasting Models
A forecast is the lifeblood of the financial sector. And while analysts like to forecast until they are blue in the face, they will never get things perfectly accurate. One way to improve these forecasts is to have more data inputs. Artificial Intelligence allows thousands more data inputs to be added to modeling software which increases the probability that a model will show someone an approximation of what is going to happen. There are even some funds currently in existence that uses exclusively Artificial Intelligence to make decisions.
Better Identifying Consumer Trends
The problem with identifying consumer trends is that, by the time a trend is detected, a new trend appears to have already popped up. Quickly and accurately identifying market trends is seen as a sort of gold mine in the financial industry. A significant factor in doing this will be artificial intelligence. The best programs will be those who can recognize what a consumer will want and need even before they do.