Collectively these data points and the patterns they uncover, can help build stronger defences.
Regulatory pressure
AI streamlines AML processes by automating transaction monitoring, risk assessment, and compliance reporting.
Machine learning algorithms analyse vast datasets, flag suspicious activities, and generate actionable insights to facilitate timely intervention and regulatory adherence.
When we explore the role of AI with KYC, image recognition and liveness tests, to help identify and potentially re-KYC (during a customer lifecycle with an institution) it is clear these can all become faster and more efficient with AI.
Financial advisory
AI-powered ‘bot-advisors’ leverage data analytics and predictive modelling to offer personalised investment strategies, portfolio optimisation, and risk management recommendations.
By analysing client preferences, BFSI goals, and market trends, AI enhances the quality and relevance of advisory services, empowering clients to make informed decisions.
This can happen in a fraction of the time it takes to manually seek and distil information.
Notice something? The challenges and opportunities are in the same areas - two sides of the same coin, if you like.
Mitigating risks
While AI offers immense potential, it also presents risks, particularly concerning ethical considerations, algorithmic biases, and susceptibility to malicious exploitation.
To mitigate these risks, robust governance frameworks, transparency measures, and ethical guidelines are imperative.
Additionally, AI-powered cybersecurity solutions play a crucial role in identifying and neutralising threats posed by malicious actors leveraging AI techniques for nefarious purposes.
Continuous monitoring, ethical AI training, and collaboration among industry stakeholders (using humans) are essential to harness the transformative power of AI responsibly and sustainably.
Changes to longstanding regulation may be required. Compliance teams may need further investment to respond to a strategic shift and ensure their organisation is ready for this new wave.
My personal AI
The use of AI isn’t exclusive to the institutions we deal with.
We are rapidly facing a world where AI is in the power of the consumer and the interactions and transactions we make financially, are no exception.
Imagine a world where your digital wallet nudges you to make prudent financial decisions, or positions the right card for the right transaction?
Or perhaps your wallet acts as the token of entitlement for better insurance rates based on your driving experience.
This pulls together your behavioural biometrics that the big data institutions have been collecting for years, to help deliver a better customer experience. And, of course, the key to this? Your mobile device.
Conclusion
AI is reshaping the landscape of BFSI services.
Driving innovation, increasing operational efficiency and regulatory compliance, and improving customer-centric service will help institutions stay ahead of the game.
By embracing AI technologies, BFSI institutions can unlock new opportunities for growth, differentiation, and value creation.
