The artificial intelligence boom has had a profound impact on fintech and the access of UK residents to more comprehensive financial services. But the technology’s ability to unlock the potential of big data insights may mark a turning point for how we manage our wealth.
Big data has the power to transform savings by enabling hyper-personalized financial guidance and autonomous saving tools that are tailored to our spending patterns and financial goals.
Because artificial intelligence tools excel at contextually understanding data, the technology has paved the way for a boom in the quality of insights that customers can now access when managing their money.
Throughout the UK, financial institutions and apps are using AI-powered big data insights to provide more tailored recommendations, track expenses in real-time, and automate transfers to savings accounts, making it easier than ever to look after our wealth.
Data shows that already 28 million UK adults are using artificial intelligence tools to help manage their money, making personal finance the number one use case for AI nationwide today.
From tailored insights to fraud detection, big data is fundamentally changing our perception of money and the security we feel when saving. Let’s take a deeper look at the innovations that the technology is bringing to the table with the help of AI tools:
The Age of Personalization
Big data allows fintech firms to accurately analyze critical factors about your cash flow, measuring your income, expenses, and transaction history to generate actionable insights using both AI and machine learning tools.
Machine learning (ML) is a natural companion to big data because the technology can seamlessly learn patterns from both structured and unstructured datasets to make predictions or decisions. This means that ML is a critical tool for providing spending insights while shaping product recommendations and fraud detection.
For example, using big data and ML, an app has the capability to notify users if their spending habits are on course to push them towards their overdraft in a month, or it may recommend a high-yield savings account to deposit surplus money into.
Tackling Financial Mismanagement
Beyond ML, big data can also support generative AI assistance for users and is becoming a powerful tool in wealth management for millions of adults in the UK.
Similarly, AI can interpret big data to study your habits based on your monthly income, where you spend your money, and what you save to provide tailored advice.
Already, platforms like Cleo, Mint, and Monarch Money are using AI algorithms to interpret the monthly spending patterns of users and can send messages about their most frequent outgoings, along with cost-effective alternatives.
There’s evidence that big data is supporting more efficiency in saving, with insights showing that those using AI-powered financial tools are cutting their overspending by around 15% on average.
Enhancing Security
Big data also provides real-time analysis of transaction patterns that can help banks detect and prevent instances of fraudulent activity instantly, helping more customers look after their finances and build trust in digital platforms.
This added security can also help to boost the safety of fintech services, with big data capable of assigning scores to transactions or accounts based on many different factors. This can help to efficiently launch investigations into suspicious activity, improving the user experience.
There’s also an element of personalization and support for financial decision-making in these enhanced security measures. Because risk factors can instantly explore previous spending behavior, it can also help fintech firms create bespoke rates for individuals looking for a loan based on a more comprehensive case-by-case credit scoring system.
The Future of Big Data in Fintech
Big data has long been a transformative innovation for the fintech sector, but it’s the recent emergence of generative AI that’s helped take personalization to the next level for the best possible results.
Already, millions of UK adults are turning to AI for bespoke spending insights and wealth management advice. With the ability to work frictionlessly with big data, it’s never been easier for individuals to know their financial behaviour inside out.
