AI in Fintech: Transforming User Experience and Financial Services
Fintech Design
July 28, 2023
3 mins read

How many posts of AI changing the world did you come across today?

The AI revolution is already here and is making a significant impact in the FinTech industry. The FinTech AI market size is projected to reach 49.43 billion dollars by 2028, according to Mordor Intelligence. FinTech companies recognize the value of AI in gaining valuable insights into customer behavior. AI technology helps mitigate financial risks in the FinTech sector. Video Link: https://youtu.be/ErSsKfvt6Kc  

Top 5 FinTech AI use cases that companies must incorporate for better user experience in their products:

5 must have fintech AI use cases infographics

1. Personalized Recommendations

Personalized recommendations page interface

 Source: Image 

Personalized experiences top the list of UX trends and as simple as emails with personalized subject lines can lead to a 26% increase in open rates. Personalization shows that your company cares about your customers and actively listens to their needs, placing them at the center. Your brand can incorporate personalization by using FinTech AI that will first analyze user behavior to understand the financial needs, goals, habits, preferences, and motivations of your customers. Based on the insights gathered from this data, AI can now give personalized recommendations on budgeting, investments, savings, and even loan options.

2. Chatbots and Virtual Assistants

Chatbots and virtual assistants interface

  Source: Image

Imagine, your money transaction has failed, but the money has been debited from your account. Yet, not a word of reassurance from the FinTech app. While you are making frantic calls to the unresponsive customer helpline, here is where FinTech AI can make your life easier. AI can help in customer service and significantly reduce costs by interacting with users in real time. AI-powered Chatbots and virtual assistants are available to users 24/7 unlike human beings and can respond promptly to all queries. Not only during times of help and support, chatbots and virtual assistants can also guide users through complex processes. A well-designed chatbot can resolve queries in minutes, reassuring the users and increasing their satisfaction.

3. Fraud Detection and Security

According to a report by BCG, financial institutions are 300 times more vulnerable to cyberattacks than companies from other industries. FinTech companies are also more likely to suffer damages to their reputation and harder to recover from such scandals. This might come as obvious since FinTech apps deal with money, however, apps still fail to strengthen their security measures. Even renowned companies like Equifax and JP Morgan Chase have fallen prey to such data breaches.

One of the best ways to tackle this issue is by using AI in FinTech apps to detect security threats and potential fraud. AI will track financial transactions and user behavior patterns to identify any discrepancies and report immediately when there's any suspicious activity taking place. AI can also help in alerting the users or fintech companies instantly which will allow fintech companies to enhance their security measures. This helps in instilling trust in users who can now enjoy a stress-free experience on your app.

4. Voice and Facial Recognition

Voice and face recognition interface

Source: Image

Another way in which AI can help in protecting the data and privacy of users is during the authentication process. Rather than simply securing the app via a password that can be lengthy and difficult to remember, AI-driven voice and facial recognition allow a seamless experience. It is unique to every user who can set voice commands, making it quicker to access the app. Companies can even pair this technology with other authentication methods to add layers of security.

5. Automated Document Processing

The purpose of FinTech AI is to make our lives easier and document processing is one such boring area that requires a lot of time, effort, and money. Especially in the FinTech industry, there are numerous documents to be verified at multiple stages of a customer's journey.  Automating document processing tasks such as identity verification (KYC), loan applications or account opening can streamline the entire onboarding process. AI will extract the relevant data from the uploaded documents, thus reducing manual labor and errors. Additionally, AI driven image recognition technology can lead to a faster KYC process where users have to click selfies and upload them rather than a human agent monitoring this step.

Automated document processing interface

 Source: Image

Conclusion:

While FinTech AI can certainly improve the user experience of the entire product, it becomes essential to use this technology in an ethical and transparent manner. For example, informing users about data collection practices before offering services like personalized recommendations is the key to gaining the trust of the users. By effectively utilizing AI in FinTech UX design, companies can ensure an intuitive, personalized, and efficient user experience for all their customers, reduce financial risk and provide security to customers' privacy and data.

Sources: 

1. https://community.nasscom.in/index.php/communities/digital-transformation/fintech/5-biggest-cybersecurity-challenges-for-fintech-enterprises-in-2020.html 

2. https://www.netsolutions.com/insights/how-to-take-your-ux-to-a-new-level-with-personalization/ 

3. https://www.apisec.ai/blog/fintech-cybersecurity-risks-and-challenges 

4. https://www.mordorintelligence.com/industry-reports/ai-in-fintech-market#:~:text=AI%20in%20Fintech%20Market%20Analysis,people%20interact%20with%20financial%20services 

Read More:

Future of Fintech UX Design: Top 10 Trends to Watch in 2023

7 Must-Have Design Features for Your Fintech Startup : Fintech UX Design

Building Alien and helping startups and enterprises with Branding, Websites, Mobile & Web Apps. Alien crew deployed 20+ Projects across industries in the last two and half years: - Banking - Financal services - Ecommerce - Healthcare - Edutech - Enterprise softwares

Subscribe for Industry insights

Get cutting-edge design insights + Free pro
resources just for subscribing!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

FAQ

What is the role of AI in transforming the future of fintech?

plus icon

AI plays a crucial role in transforming the future of fintech by enhancing automation, improving decision-making, and enabling personalized experiences.

How does AI impact the financial services industry?

plus icon

AI revolutionizes the financial services industry by enhancing efficiency, enabling personalized experiences, improving risk assessment, and detecting fraudulent activities.

How is AI transforming customer experience?

plus icon

AI is transforming customer experience by personalizing interactions, automating processes, and providing efficient support through chatbots and virtual assistants.

How does AI improve user experience?

plus icon

AI improves user experience by personalizing content, providing recommendations, automating tasks, and enabling faster and more accurate responses.

How AI is helping FinTech companies?

plus icon

AI is revolutionizing FinTech by automating tasks, enhancing fraud detection, personalizing customer experiences, and improving risk management.