Artificial intelligence and DeFi have improved forecasting in ways beyond imagination
Artificial Intelligence (AI) and decentralized finance (DeFi) are two technological developments that have gained tremendous traction in the last few years. Despite being in its infancy, Artificial intelligence and DeFi have already revolutionized many sectors, including healthcare, manufacturing, and financial trading is not exempted. Financial traders use AI-powered algorithms to analyze market data, identify trends, and make trading decisions more quickly, changing the financial trading game.
The Rise of DeFi
Inefficiencies, high costs, and limited access for the unbanked population have long plagued the traditional financial system. DeFi aims to address these issues by leveraging blockchain technology and smart contracts to build decentralized applications (DApps) that enable peer-to-peer financial transactions without intermediaries. By eliminating intermediaries, DeFi protocols reduce costs, increase efficiency, and enhance accessibility, making financial services available to anyone with an internet connection.
One of the critical challenges facing DeFi has been scalability. The Ethereum blockchain, which hosts most DeFi applications, has struggled to handle the increasing transaction volume, resulting in high fees and slow confirmation times. This scalability issue has limited the growth and adoption of DeFi.
What are the Advantages of DeFi?
Accessibility: Because no central authority is involved, Decentralized Finance systems are more accessible. This implies that regardless of geography or financial resources, everyone may use the system.
Transparency: Because all activities are carried out on a public, open-source blockchain, DeFi systems are more transparent.
Permissionless: This ensures that everyone can access the system equally and monitor the blockchain’s activity.
Defi and AI in Finance
AI has improved forecasting in ways beyond imagination. All this has paved the way for enhanced decision-making. Today, as most sales forecasting is automated, finance professionals can now focus on closing deals rather than number crunching. What must be noticed is the impact AI has left on the marketing aspects of the business. With AI, the marketing teams now focus on generating leads for the brand. Over the years, what posed to be a common observation is that vendors did build predictive business intelligence solutions to make better decisions, but this did align with the needs of the finance team. Today, the story is way different than what it used to be.
With the invention of purpose-built technology for finance, things couldn’t have got any better. Yet another advantage of roping in AI for finance has resulted in the professionals improving their decision-making ability. This comes as no big surprise as they are now left with more time due to automation. They can also partner with inter-department colleagues and ultimately improve forecasting accuracy. Technology has transformed the world of finance professionals to the extent that they can quickly address the variances between predicted and actual numbers. The risk involved in automation is reduced drastically.
This is because of the apparent reason that manual methods of forecasting are no longer given preference. With this, finance professionals can come up with accurate results. The fact that AI works all day, all night – 365 days a year is all the strong reason that makes this remarkable technology worth investing in.
