Ai in Finance: Exploring Opportunities and Facing Challenges

The financial industry is starting to exploit the capabilities of artificial intelligence to improve productivity and customer satisfaction. Toptal Finance experts talk about the innovation opportunities and the difficulties to be overcome.

After years of quiet evolution, artificial intelligence (AI) is now innovating at an unprecedented pace in all industries. Even the financial sector, a highly regulated sector that was initially slower to adopt the new technology, is starting to use artificial intelligence to analyze and predict, detect and prevent bluff, manage personal finances, perform compliance-related tasks and serve and support customers. But the challenges and opportunities are still to come.

Financial institutions were considered relatively immature in terms of AI implementation compared to other industries, and they are expected to lag behind for the foreseeable future due to regulatory issues, lack of AI infrastructure, and shortage of AI-trained workers.

But the advent of large linguistic models (LLM) and generative AI (GEN AI) at the beginning of 2023 has led to changes. According to forecasts by the technology research company IDC, global spending on artificial intelligence equipment and services will exceed few billion by 2027, and financial service providers are expected to double their spending on artificial intelligence during this period, the international monetary fund announced. This is understandable given the potential of artificial intelligence to reduce the number of human errors, predict market trends, speed up document analysis and process huge amounts of data. However, this could have disastrous consequences if technology paves the way for sophisticated theft, bluff, cybercrime or even financial crisis options. Caution will continue to be a slogan, even if the implementation is accelerated.

In this article, three of the leading specialists in finance — Carlos Salas Najera, former head of equities at London & Capital, Arvind Kumar, who has worked around the world with KPMG, Goldman Sachs and EY, and David Quinn, a seasoned financial expert who runs his own asset management company — will share their opinion on intelligence artificielle.et Finance.

How is artificial intelligence changing the financial sector?

Companies are leveraging the capabilities of AI and LLM to simplify and speed up tasks involving large amounts of data, detect bluff and improve customer service. Despite a slow start, it is easy to see why the financial sector and financial teams within companies are accelerating the adoption of this technology.

“There has been a rapid paradigm shift in the last decade, with organizations such as BlackRock implementing artificial intelligence and forcing the rest of the players to catch up or withdraw from the game,” said Salas, who specializes in AI and machine learning (ML), with a focus on investment applications. In 2023, BlackRock integrated artificial intelligence into various aspects of its business in order to improve investment strategies, improve customer results and stimulate innovation. Salas adds that the benefits of using artificial intelligence in Finance, such as improving operational efficiency and the possibility of making more informed decisions, are already well documented. However, he noted that some investment companies had resisted adopting artificial intelligence due to the need to update existing systems, problems with integrating the technology into existing financial models and other potential risks.

Some of these obstacles have been eliminated thanks to the rapid proliferation of ChatGPT and the gradual introduction of AI into our daily lives. “This reluctance has diminished as more success stories and tangible benefits of adopting AI have emerged,” says Salas. “In addition, regulators have become more sensitive to the use of artificial intelligence in the financial field, which further facilitates its introduction. However, there are still many gaps in the regulatory framework that force many financial companies to wait.