The finance world is at a turning point with artificial intelligence. AI has been a part of finance for a long time. It started with credit scores and fraud detection in the 1980s. Since then, it has grown with machine learning and AI-powered FinTech.
Today, AI is used for financial modeling, risk assessment, and underwriting. It helps in making predictions and identifying patterns. This makes it a natural fit for the finance industry, which relies heavily on data.
Banks and credit unions are now exploring new ways to use AI. For instance, MSU Federal Credit Union uses AI to help members save money on groceries. It suggests which cards to use with which vendors. In the future, members might not need to visit branches for large transactions or to verify their identity.
The finance industry is now at an inflection point. It is trying to figure out what comes next. Will new technologies like generative AI and large language models build on existing AI use? Or will they create a new world of AI in finance? The question is, how smart can these models get?
There are challenges in implementing AI in finance. Older documents are often siloed, making it hard to adopt new tools. Regulations are unclear and vary by location. There are also concerns about data security. To address these, MSUFCU created an AI governance committee. It includes representatives from risk, legal, human resources, innovation, and digital experience.
Despite these hurdles, AI is becoming a norm in finance. Just like the internet, AI will likely become so common that we won't even think about it. In the next five to 10 years, AI could be as ubiquitous as smartphones are today.
However, not all AI in finance is genuine. Some companies use the term AI to make their advancements sound more impressive. They might not fully understand what AI is or how to use it effectively. This is why it's important to look for companies that use AI to make a real difference.
The finance industry is at a crossroads. It has to decide how to move forward with AI. It has to overcome challenges and embrace new technologies. But if it does, AI could revolutionize the way we handle our money.
