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Machine Learning in Finance

What is Machine Learning?

It is the consolidated and constantly improving pool of information that helps a machine perform a task to the best of its ability. The cutting-edge algorithms developed by software experts provide the ultimate customer experience.

What is the Difference Between Machine Learning and Artificial Intelligence?

Artificial intelligence and machine learning are terms sometimes used interchangeably. While the two concepts are closely related, they are not the same. Artificial intelligence is the result of machine learning. Machine learning is achieved by human correction of errors. Once the software receives a correction, it doesn’t make the same mistake again. Over time, it becomes smarter and less likely to make mistakes.

How is Machine Learning Used in Finance?

Machine learning is playing an integral role in many aspects of the financial ecosystem. Whether it is approving loans, managing assets, or assessing risks, machine learning makes the financial industry smarter and more efficient, reducing errors and mistakes.

Which Banks are Leading the Way in Machine Learning?

In the United Kingdom, HSBC is one example of a bank that’s providing 360-degree views of account data to its customers. With its Beta app, HSBC allows customers to see accounts, loans, mortgages and savings all in one place, and this included accounts with non-HSBC banks, making it a truly universal view of a customer’s finances. Other tools include the ability to set budgets, see spending and create rules.

Citibank fights fraud with FeedzAI. This global enterprise uses data science to crush fraudulent attempts in the world of online and mobile banking. Citibank uses machine learning to analyze large amounts of big data in real time, alerting Citibank of potential fraud.

Abe AI is another tool that’s taking things one step further by using Artificial Intelligence to help customers better predict their financial future based on their past transactions and spending patterns. This goes beyond simply providing information and delves into world of financial advisory.

How Machine Learning is Changing the Financial Services Industry

Thanks to FinTech tools from companies like Yodlee, financial institutions and FinTech companies are making easier lending decisions to the ability to predict cash flow or determine a wealth management clients’ potential value, this tool has exploded on the financial scene in recent years.

Lenders are one sector of the financial services industry greatly benefitting from machine learning tools. By aggregating a borrower’s financial history, including income and expenses, lenders can more accurately predict how a borrower will perform with a certain loan, reducing errors and cutting costs in the process. It also leads to quicker answers in an industry where speed is critical. Lenders can also tap into customer data to help predict whether a borrower is likely to default on a loan.

Yodlee and Machine Learning in Finance

Only Envestnet | Yodlee bring together data + intelligence using the best financial data available. By applying machine learning, Yodlee enables financial institutions and FinTech innovators to deliver better outcomes and solutions for their customers. Wealth managers and financial advisors can also greatly benefit from our reconciliation tools.

Yodlee also offers Transaction Data Enrichment, which taps into 18,000+ global data sources from more than 22 million active users to provide the largest, most comprehensive data coverage available. Pairing this data with cutting-edge machine learning techniques results in a highly-enriched set of industry-leading digitized transactions. Other Yodlee tools that engage machine learning to produce insights include the Cash Flow Analysis app, part of our FinApp series, that helps users see expenses and income as well as projected cash flow for better decision making.