We provide in this paper an analysis of how Artificial Intelligence (AI) companies are and will be changing the Financial Services Industry. In particular two main areas will be disrupted by AI and Machine Learning (ML) technologies: Financial Marketing and Investing.
Both disciplines are in the middle of a big data revolution: larger, structured and unstructured datasets, modern Data Analysis that makes extensive use of Ai and ML and faster and cheaper computing paradigms.
Financial Marketing is now digital marketing and that means the inevitability of algorithms taking over the value chain process. Consumers want a 24 / 7 easy access to services and products that can be achieved only obviously with a high degree of automation. These are uncharted territories algorithms should help to customize the new digital experience.
Investing is an information processing game, AI and ML will help there in modeling unstructured data using Natural language Processing techniques to measure for example sentiment and some Machine Learning supervised and unsupervised techniques that allow for more flexibility in capturing highly dimensional non-linear data generating processes. All models in financial markets obviously should deal with very noisy data generating processes possibly non-stationary.
All financial services firms should expand their technology / modeling toolbox to these techniques. They will transform finance the only open question is when.