Machine learning in Finance Business Model

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Details

  • Author: John Budha Magar
  • Title: Machine Learning in Finance Business Model
  • Supervisor: Prof. Dr. Jörg Osterrieder
  • Degree: Bachelor of Science
  • University: Bern University of Applied Sciences
  • Year: 2023
  • Status: Working Paper

Summary

Study of Machine Learning application in Finance Business Model.

Abstract

Machine learning is increasingly used in the financial industry to improve efficiency, enhance customer experience, and make better-informed decisions with cost-effective solutions. Machine learning the part of Artificial Intelligence is changing the way financial institutions operate. The implementation of Machine Learning has been occurring in different sub-sectors of the finance industry, such as Deposit and Lending, Market Infrastructure and Professional Services, Investment Management, Payments, Insurance, and Capital Markets. Application of Artificial Intelligence in the finance started by automating routine task like providing tailored financial plans when it was conceptualized in 1982 by Applied Expert Systems. Leading financial service providers such as J.P Morgan use Artificial Intelligence in symbiotic autonomy in which there is a symbiosis relationship with human beings [1](JPMorgen, 2018). Machine learning is better at Loan Underwriting, Credit Scoring and Churn Predictions, Claim Management and Fraud Detection, Quantitative Trading, Customized Banking, Cybersecurity Protection, and to Predict Analysis.

Financial businesses model should not impose their interest on top of human values and rights [2](BloombergTechnology). The decisions made by a few people which influence the world should be transparent to the public. The combination of variables being combined by Artificial Intelligence Machine Learning algorithms should be clear for the general public and explainable [3] (EU,2021).

Overall, Artificial Intelligence Machine Learning has the potential to streamline financial processes and improve efficiency in the finance industry. It is important to note that AI is not a replacement for human decision-making, but rather a tool that can assist with tasks and provide insights that would be difficult or impossible for humans to achieve on their own.

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