How To Use Artificial Intelligence For Investing
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The world of finance has been around for centuries but there are always new innovations that change the landscape. Recently, with the rise of the fintech companies just like Monzo, Chime, Aspiration, and Revolut, consumers have felt more in control in managing their financial accounts through self-service platform in the form of a simple mobile application.
There is a clear rising demand for quick and efficient financial services that cater to the needs and preferences of an ever-evolving audience. So start meeting the needs of it’s customer, financial institutions are looking at “Artificial Intelligence” to give them an edge.
In this article, we will dive deeper into the world of Artificial Intelligence and see how can we use it for our investments and also in the world of Real Estate investing.
What is Artificial Intelligence?
There is no universally accepted definition of the term, “Artificial Intelligence” but, we generally use it to refer to the capacity and ability of a machine to showcase intelligence that is almost at par to humans and have a degree of autonomous learning.
There are a lot of benefits of using Artificial Intelligence and here is a list to show you some:
- Artificial intelligence has the capabilities to recognize basic to complex patterns
- It can analyze huge loads of data
- It can forecast future events by anticipating it based on the pattern that it has analyzed
- It can make informed decisions by using data
- It can make rules
- It has the capacity to communicate with others
- It can assist with onboarding
- It has the ability to give you tailored and relevant content
- It can promptly answer to questions
- It can give a real-time response to clients
- It has the capabilities to detect fraudulent activities
- It can give companies an exciting dynamic
What are the benefits of AI for the investment sector?
The creation of Artificial Intelligence has a basis which is the four pillars of transformation for the world of investment. The first pillar is called Generating Alpha, which is to have access to big data that can open doors to big organic opportunities for development.
The second pillar is Enhancing Operational Activity which can be by innovating the way things are done on a daily basis in order to free up more time.
Next, the third pillar is Improving Content and Product Distribution. This is about configuring content to fit what the investors need and their different preferences in real-time.
Lastly, the final pillar is Managing Risks. In hare, Artificial Intelligence creates a more compliant environment and bolster risk management functions.
In the current practice, Artificial Intelligence is being directly used in the environment sector. It has proven to give many benefits which include the following:
Better forecasting of future economic outcomes
Technology beats itself every now and then. With non-stop developments, we are able to increase computer power and sophisticatedly analyze big data in order to have better economic outcome predictions. Artificial Intelligence can pave the way for a more informed portfolio construction process. This wouldn’t be possible without the rich statistical models that can aid intelligent risk management strategies.
It essentially works by comprehensively analyzing and understanding years of market data. If utilized well, Artificial Intelligence can be used to effectively identify new trading opportunities.
What’s good about this is that investors can save their precious time knowing that their investment portfolio will be automatically adjusted to get the most promising outcomes. This is thanks to the algorithmic programs that Artificial Intelligence can perform.
Avoidance of emotional decision making and biases
Most of the time, we are not rational about our investment decisions. This is because of the emotions that we feel. As you can see, emotions can lead to behavioral biases and poor judgment.
Emotional decisions can happen especially if you are trying to avert losses. Using artificial intelligence can help eliminate these problematic instances.
We are not indifferent about the fact that machines have no heart- this means that they don’t have the capacity to feel emotions. When we use artificial intelligence, we are actually allowing a system to create timely strategies to achieve the most promising outcomes. What we are trying to avoid in choosing this course of action is the last-minute decision or human error.
Stronger advisor-client relationships
With the use of Artificial Intelligence technology, financial advisors and investment firms are now able to automate specific touchpoints of an advisor-client relationship. These range from the AI-enhanced initial communication to risk profiling. With this innovation, consumers can pursue their investment interests and goals much faster than venturing into manual processing.
Moreover, intelligent information management solutions also made it easier for investment firms to process and secure relevant information in a timely, orderly, and compliant way.
Transparent, efficient, and data-accurate platform
Clients are now more interested in looking for brands that have it all. The onslaught of digital advancements has made people more impatient. They seek more advanced services and they now have little concern about brand loyalty. With the use of Artificial Intelligence, you can now give your customers a transparent and data-backed platform to work on.
Artificial Intelligence In Real Estate Investing
As we have mentioned before, we are going to discuss how using Artificial Intelligence is beneficial specifically for investing in real estate. Here are the things that an AI can help you with for your real estate investment!
Artificial Intelligence can sort through big masses of data in order to give you a more concrete list of properties that fit your specific criteria in mind. It sifts through a lot of options, removing the choices that are not relevant in order to lay to your the best options remaining.
Many famous property searching applications and websites utilize this kind of artificial intelligence technology. The benefit that you can get from here is the quick delivery of accurate information.
One of the many perks that you can get in using artificial intelligence is the automatic inputting of data such as detailed property specifications directly into the database. With an AI, you can cut off the time of processing by rapidly finishing the data entry portion of it.
You can use artificial intelligence to create chatbots that can become your virtual online assistant. They have the ability to simulate human conversational behavior, plus they can immediately respond for twenty-four/seven!
Furthermore, the data from the chats are automatically stored, and you can use them to generate insights in the future!