AI FOR FINANCE
Trend reporting
Salesforce CEO Marc Benioff explains why his company’s AI system, Einstein Forecasting, is vital:
For a CEO, typically the way it works is you have various people in your staff meeting who are telling you what they want to tell you to get you to believe what they want you to believe. Einstein comes without bias. To have Einstein’s guidance has transformed me as a CEO.
Fraud detection
HSBC has developed an AI-based solution that improves the speed and accuracy of fraud detection. The AI monitors and scores millions of transactions daily, using data on purchase location and customer behavior, IP addresses and other information to identify subtle patterns that signal possible fraud. HSBC first implemented the system in the United States, significantly reducing the rate of undetected fraud and false positives, and then rolled it out in the UK and Asia.
Machine learning algorithms, like those used by Mastercard’s Decision Intelligence technology analyze various data points to identify fraudulent transactions that human analysts might miss, while improving real-time approval accuracy and reducing false declines. Using machine learning to spot unusual patterns and improve general regulatory compliance, workflows help financial organizations develop more efficient and accurate processes.
Ocado, an English online supermarket, has announced what it says is the world’s first AI-based fraud detection system for online grocery purchases. The system identifies orders that are delivered but not paid for and deter-mines whether it is the result of malicious intent by analyzing data from past orders. Ocado engineers implemented a deep neural network using Google’s open-sourced TensorFlow software library and uploaded the fraud detection system to a data lake in Google Cloud. The company claims that the system has improved the accuracy of Ocado’s fraud detection by a factor of 15.
Credit risk
AI can improve credit risk models by both denying risks and also ex-tending the credit model to previously under-lent groups. Banks’ current credit scoring systems are biased against the underprivileged because the current system assesses them mainly on obvious, strong features. AI, on the other hand, looks at weak and hidden features. In this way, you get a well-rounded and holistic picture. So people that were disenfranchised and not able to get credit because they didn’t fit the standards in the traditional model can become enfranchised and get more credit through AI.
Reviewing contracts
Deloitte, one of the globe’s Big Four accounting organizations, formed a partnership with machine-learning developer Kira Systems to create models that are intended to quickly read thousands of complex documents, extracting and structuring textual information for better analysis. If a company has 15,000 contracts to be reviewed, an auditor will try to get a representative sample for analysis. With AI partnerships like Deloitte and Kira Systems, natural language processing and machine learning train the application to recognize the structure of these contracts and to pick out the key clauses, terms and conditions and the key points within a contract in an automated fashion.
Procurement
SAP CoPilot, a digital assistant by German software multinational SAP, is designed to help businesses with tasks such as purchasing contracts and collaboration with colleagues. A typical business question might be: “What’s my total spend with vendor X?” SAP’s goal is to eliminate the need for users to manually interact with multiple work apps to get a job done. SAP CoPilot does this through virtual intelligence, speech recognition, natural language processing, statistical analysis and machine learning.
Financial advisors
Robo-advisors, which provide financial advice with minimal human intervention, analyze and understand how account holders spend, invest and make financial decisions; this allows them to customize the advice they give customers. Wealthfront, an automated investment services firm based in Redwood City, California, has artificial intelligence capabilities to track account activity on its own. The company helps clients analyze and understand how account holders are spending, investing and making their financial decisions, in an effort to provide financial planning advice.
AI for Finance: Best-in-class model
Finance is a natural fit with AI since both are focused on data. AI enhances finances first through analytics and predictions, which provide solutions to challenges in cash-flow, budgeting, planning and reporting. AI also offers insight in identifying trends and detecting fraud. AI then reduces the admin burden of finance through automation, such as analyzing the text in thousands of contracts and assigning workstreams. Finally, AI virtual agents take on the more strategic role of the CFO as a Robo-advisor offering customized financial advice. The future of the finance function is AI-powered.
CASE STUDY: AI FOR FINANCE SMARTBIZ LOANS FINANCIAL ADVISOR
SmartBiz Loans, a digital marketplace for SBA loans, unveiled its advisor product, which will help users determine their loan readiness and provide guidance on financial health matters.
“It’s the world’s first intelligent CFO advisor that uses artificial intelligence and machine learning to help customers,” SmartBiz declared. Those customers, as the name would suggest, are SME businesses. The advisor tool is a free service that can be accessed by creating an online sign-in and password. To receive advice, the user is required to upload tax documents. Based on the information in those documents, the advisor uses AI and machine learning to provide a series of analysis reports, from cash-flow analysis and business credit to determining the firm’s loan-readiness. Through a chatbot system, the advisor is also able to answer questions.