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2021 | Book

Artificial Financial Intelligence in China

Authors: Prof. Dawei Zhao, Wenting Zhang

Publisher: Springer Singapore

Book Series: Financial Mathematics and Fintech


About this book

This book starts from the application scenarios of artificial financial intelligence regulation, commercial banking, wealth management and payments, etc., and makes a detailed study of the main scenarios of the application of China's artificial intelligence in the financial field, and also analysis specific application cases of China.With the popularization of smart phones and the rapid development of e-commerce, mobile payment, big data and other technologies are in the ascendant in China in recent years. In particular, artificial intelligence technologies in the form of facial, speech and semantic recognition are showing preliminary advantages in the field of FinTech, and the future era of Intelligent Finance has quietly come. The Chinese government has clearly put forward "China should rely on a robust cycle of domestic demand and innovation as the main driver of the economy while maintaining foreign markets and investors as a second engine of growth", science and technology innovation is the basic motivation of economic and social cycle, to implement the " dual circulation strategy ", it is necessary to understand the key role of scientific and technological innovation in financial innovation services, and improve financial services must be driven by science and technology. There is a natural relationship between artificial intelligence and financial services, because financial services are credit and information intermediaries, and data is the most critical for finance, while artificial intelligence has a super ability in dealing with complex data. At present, many Chinese Banks have applied artificial intelligence to their daily operations and management, such as accurate customer identification, enhanced process tracking, intelligent marketing, and product process transformation, so as to simplify financial service processes and shorten service cycles. In General, this book both pays attention to practical application and theoretical, which is a useful reference book in theoretical research and practical work, and also helps readers to understand the application of intelligent finance in China.

Table of Contents

Chapter 1. FinTech Towards Intelligent Finance
With the deep integration of big data, cloud computing, artificial intelligence, Internet of Things, and other information technologies with financial services, financial boundaries have been repeatedly broken and reconstructed, while scientific and technological forces are providing continuous innovation vitality for financial services. FinTech, as defined by the Financial Stability Board (FSB) in 2016, is technology driven financial innovation, aimed at transforming or innovating financial products and services by using existing high-tech achievements, planning modern business models, and optimizing business processes, so as to promote continuous financial transformation and upgrading and improve quality and efficiency.
Dawei Zhao, Wenting Zhang
Chapter 2. Scientific and Technological Supervision of Artificial Intelligence
The deep integration of science and technology with finance carries both huge potential benefits and a new set of risks, which heighten the vulnerability of the financial industry. The wide application of science and technology brings novel challenges to financial supervision, while at the same time providing new technical ideas and solutions to enhance supervision efficiency and improve supervision level. In the context of the rapid development of financial technology, the continuous emergence of financial innovation formats, the alienation of traditional financial risks, and the appearance of new financial risks have presented more, and higher, requirements for China’s financial supervision. Meanwhile, China’s financial regulators have faced severe challenges due to a series of problems, such as the mismatch between regulatory responsibility and regulatory resources, insufficient regulatory technical means, regulatory lag behind financial innovation, and regulatory arbitrage. In order to improve the supervision means of financial regulators and enhance the level of financial supervision, we need to use “science and technology + regulation” to deal with the challenges brought by “science and technology + finance”.
Dawei Zhao, Wenting Zhang
Chapter 3. Technical Path of Artificial Intelligence Compliance Efficiency
The focus of financial work is risk prevention and control, and this is also an important part of the overall national security concept. China has repeatedly stressed that strengthening financial supervision, preventing and defusing financial risks, especially systemic financial risks are the fundamental tasks of financial work. Strengthening financial supervision requires financial institutions to continuously enhance compliance awareness and take the initiative to improve compliance management. Relying on new technologies such as big data, blockchain, and artificial intelligence (AI), compliance technology (CompTech) strives to provide faster and more effective supervision schemes for financial institutions. Given the complexity of financial transactions and the huge amounts of data involved, AI and machine learning are playing an increasingly important role for financial institutions and regulators. CompTech needs to grasp the trend of AI, realize timely and efficient supervision and compliance, maintain financial security, and prevent system risks.
Dawei Zhao, Wenting Zhang
Chapter 4. Smart Payment in China
The change of payment mode from barter to natural currency, to paper money and today’s e-payment, is a progressive process that continuously improves transaction efficiency on the premise of security and reliability. Today, with the rapid development of information science and technology, what will be the next innovation of payment mode? Already, artificial intelligence has penetrated deeply and extensively into all levels of payment, and is continuously evolving towards further intelligence and diversification. It plays a vital role in elevating payment efficiency, improving user experience, and implementing financial regulation.
Dawei Zhao, Wenting Zhang
Chapter 5. Opportunities, Risks, and Breakdowns Brought by AI to Commercial Banks
Since the coining of the term “Artificial Intelligence” (AI), its definition scope has evolved from an application program with pre-set rules of logic, to a technology that simulates human cognitive function. The goal of AI is to allow computers to imitate human intelligence, perception, thinking, and action, so as to achieve automation and gain analytical insights. To imitate human intelligence, AI applications adopt two methods: rule-based and non-rule-based algorithms. Rule-based AI uses pre-set rules to “learn”, while non-rule-based AI uses machine learning algorithms to “learn” and a trained AI model to “think”. The key driving force for the development of AI is the huge increase of available data and the great improvement of computing power in traditional computers and mobile devices, as well as the continuous development of machine learning algorithms. Commercial banks conduct large numbers of customer capital transactions, and hold large amounts of account management information. The application of AI in commercial banks will effectively improve the retail service level, enhance customer experience, and alleviate difficulties such as “financial disintermediation” and fierce market competition, or become the next profit growth point of commercial banks.
Dawei Zhao, Wenting Zhang
Chapter 6. Robo-advisor and Expert Advisor
A robo-advisor is an investment advisor based on core artificial intelligence technology. The technology encompasses perceptual intelligence, related to human sensory awareness such as vision and hearing; and cognitive intelligence, linked to human language, understanding and logic, such as learning, reasoning, thinking, and planning. At the current stage of development, perceptual AI mainly comprises image recognition technology, including iris and facial recognition, and unmanned driving as regards vision; and speech synthesis, voiceprint recognition, and speech evaluation as regards hearing. Cognitive AI, which is applied in games, chess, and most notably in natural language processing (NLP), includes semantic analysis, pragmatic analysis, machine translation, text matching, text classification, and dialogue system. Hence, AI technology must correspond to at least one of “eyes, ears and mouth”. Any non-human advisor in the financial industry that does not involve one of these three is simply an application of traditional network engineering technology, and cannot be included under the term robo-advisor.
Dawei Zhao, Wenting Zhang
Chapter 7. Intelligent Finance Wealth Management in China
Since 2013, when Yu’E Bao ushered in an era of Internet wealth management in China, the country’s “Internet + Wealth Management” market has developed rapidly. Online wealth management meets the demand for wealth management by long-tailed investors, which cannot be fulfilled by traditional wealth management modes. It will provide more constructive policy suggestions to the benefit of the better integrated development of wealth management industry and AI in China in the future by searching thoroughly the history and environment of online wealth management, learning from the effective experience of wealth management by AI abroad and combining with the current integrated development of “AI + wealth management” service industry in China.
Dawei Zhao, Wenting Zhang
Chapter 8. Intelligent Finance in China’s Financial Market
Increasingly applied to the financial market over recent years, AI is on track to alleviate the pain points of the market, promote the fast, sustainable development of the financial industry and spearhead transformation of the market. Compared with practices abroad, the application of intelligent finance is at a nascent stage in China, where the regulatory system still requires improvement. In this context, the Chinese financial industry should strengthen self-discipline, enhance the quality and efficiency of financial services, and control the risk of technological innovation to maintain the steady development of the industry.
Dawei Zhao, Wenting Zhang
Artificial Financial Intelligence in China
Prof. Dawei Zhao
Wenting Zhang
Copyright Year
Springer Singapore
Electronic ISBN
Print ISBN

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