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Can AI and robotics help address issues of financial inequality through fintech?

Dalia Stannion

Yes, AI and robotics can definitely help address financial inequality through fintech. With the power of automation, these technologies can improve efficiency and reduce costs in financial services, making it more accessible to a broader range of people.

One significant way that AI and robotics are already making an impact is through robo-advisors. These are automated investment platforms that use algorithms to manage client portfolios. By eliminating the need for human advisors, robo-advisors can offer lower fees and minimum balances, making investing more cost-effective and accessible to individuals with fewer resources.

Another way AI and robotics can help is by enhancing the credit decision process. Traditional banks often rely heavily on a person's credit score when evaluating their creditworthiness. However, AI algorithms can analyze a vast amount of data and can consider a more extensive range of factors than just credit scores. This wider coverage is particularly relevant to people who may not have an extensive credit history. By using AI-powered tools like these, it's possible to provide loans or other financial products to those who might have been previously ineligible, addressing inequality in access to credit.

Moreover, AI can help to reduce fraudulent activities, which disproportionately impact people with low-incomes. With automated systems that can detect anomalies in financial transactions, banks and other financial institutions can prevent fraud wherever it occurs.

Robotic process automation (RPA) is another potential fintech solution that can help address financial inequality. RPAs are designed to execute repetitive tasks with higher efficiency and accuracy than humans. These tasks can range from simple administrative duties like data entry to more complex work, like underwriting and compliance. By automating these processes, it's possible to reduce errors and costs, which should translate into more affordable financial products that are readily available to all.

Overall, it's evident that AI and robotics can provide fintech solutions that address financial inequality. From robo-advisors and algorithmic-based credit scoring to RPA and fraud detection, these technologies can enhance efficiency, reduce costs, and improve access to financial services. By using these technologies in a meaningful way, the financial industry can help close the inequality gap and create more equitable access to financial services for all.