The rising domination of the financial service sector by digital technologies such as the cloud technology, and Artificial Intelligence (AI), is pointing at a brighter future for the banks, and boosting customers’ confidence in service delivery.
The Regional General Manager, North, West, East, Central Africa, Levant & Pakistan, Microsoft, Ibrahim Youssry, in a statement, was quoted as saying that many players in the financial service industry (FSI) have started embracing cloud technology and AI to improve their agility, array of service offerings, and customer experiences.
Also, the latest World Economic Forum (WEF) report on New Physics of Financial Services (NPFS), stated that approximately 40 per cent of African bank customers prefer to use digital channels for transactions, to using branch channels.Speaking on how AI has impacted the FSI and why it should be embraced, Youssry said the long-term impacts are radical and transformative, and have put the FSI ecosystem into reorganisation.
According to him, Africa’s objective within the next decade should be to ensure that the next 100 million Africans are financially included, noting that this could be achieved by the FSI using available new technologies like cloud computing and AI.He said the ongoing digital transformation is remaking the world using AI as a frontrunner, noting that although the digital journey will leave no industry untouched, the FSI is currently witnessing its fastest and most fundamental effects.
According to Youssry, large and established corporations, often with extensive heritage and market dominance, have traditionally dominated the FSI, which have made many FSI companies to enjoy relatively low competition for customers, and have been slow to innovate and change with the times.He maintained that by entering the levelling power of the cloud, accessible analytics and machine learning, any scrappy, determined Financial Technology (Fintech) startup could disrupt a whole market or sector.
He said: “Many of these startups offer alternatives for banking, payments, transfers, payroll, credit, and other financial services and these digital-first businesses are highly agile, and are creating a whole new customer base that was underserved by established FSI companies, putting the pressure on older firms.
“As a result of this, many FSIs have started embracing cloud technology and artificial intelligence (AI) to improve their own agility, their array of service offerings, and their customer experiences.“The added competition is good for the industry, as customers will benefit from new and improved technologies that change the way the industry interacts with them and meets their expectations.”
Speaking further, Youssry noted that AI lies in the heart of things like Chatbots, advanced customer credit assessment; relationship management, security, anti-money laundering; and fraud detection which help FSI serve their customers better.
He argued that Chatbots, which are customer-facing AI, draws from big data and machine learning to respond to customer queries, streamline customer support on routine services, makes product recommendations and helps FSI companies be ever-present for their clients, while reducing the resources required to do so.
“For fraud detection, AI-powered technology enables computers to mimic, extend and amplify the thought process of a human analyst, at a pace and scale unmatched by humans. It can review trillions of transactions in every possible portfolio in an organisation.“Because of this, banks, Fintechs and payment facilitators are able to detect and be alerted to potential fraud by receiving fast, efficient and accurate alerts of the likelihood of an individual’s card or account being compromised,” he added.