This document discusses AI and machine learning applications in the financial industry. It outlines three use cases: 1) automated credit risk assessment using machine learning-based credit scores, 2) FX forecasting and hedging using cashflow forecasting, FX market prediction, and hedging optimization, and 3) extracting financial information from text using natural language processing and text analytics. The document argues that AI will be highly disruptive in finance, similarly to how electricity, the color TV, and the internet disrupted previous industries, and that financial firms should view AI not just as a disruption but as an opportunity.

1. Gopi Krishna Suvanam
AI & Ml
Disruption in
Finance
AI based Analytics solutions to the Financial Industry

2. ARTIFICIAL INTELLIGENCE/MACHINE LEARNING VS DATA ANALYSIS
AI based Analytics solutions to the Financial Industry
Data
Big, Small,
Whatever
Describe
Predict
Prescribe
Data Analytics
Automatically
Decide
Learn from
Responses
AI
ML

3. TOP AI – ML APPLICATIONS IN FINANCE
AI based Analytics solutions to the Financial Industry
Lending/Credit Trading
Investment Planning
Automatic
underwriting and
tracking early
warning signals
Robo-advisory
and automated
investment
Machine driven
trading based on
various signals
Predictive
modelling and
resource
optimization

4. Transactions Profile ML Score
BANK/
NBFC
 A traditional Bank looking to give loans online with automatic underwriting
Customers want instantaneous
credit
No time to go to branch or
interact with credit officer
Machine Learning Based Credit Scores
USE CASE I: AUTOMATED CREDIT RISK
Learn Continuously
AI based Analytics solutions to the Financial Industry
PROBLEM
SOLUTION
OUTCOME
Online credit in 5 minutes

5. USE CASE II: FX FORECASTING AND HEDGING
EXPORTER  An exporter has significant FX exposure
High volatility in FX markets
Quick decision making needed
Decision making tool and
automatic trading
Hedging Optimization
PROBLEM
SOLUTION
OUTCOME
AI based Analytics solutions to the Financial Industry
Cashflow/
Business
Forecasting
FX Market
Prediction
Forward
Market Pricing
Hedging
Optimization

6. USE CASE III: FINANCIAL INFORMATION FROM TEXT
CFO  CFO of a manufacturing firm looks at several research reports on a daily basis
1. Automatic summaries of articles using natural language
processing
2. Keywords and financial facts extracted
Less time spent on reading
and more on action
Text Analytics
PROBLEM
SOLUTION
OUTCOME
AI based Analytics solutions to the Financial Industry
DEMO
Information overload
No time to go through all reports

7. DISRUPTION OR THE NEXT WAVE OF OPPORTUNITY?
AI based Analytics solutions to the Financial Industry
0
10
20
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40
50
60
70
80
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100
1900 1920 1940 1960 1980 2000 2020
Electric power Colour TV Internet Smartphone usage
Pace of Technology Adoption is Speeding Up
AI ??
“AI is one of the most important things humanity is working on. It is more
profound than, I dunno, electricity or fire” – Sunder Pichai

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