Given the sheer volume of fraud and the huge payouts and fines that face companies that don\u2019t adequately protect their customers, it’s no surprise that fighting financial crime is a topic that dominates boardrooms. No longer a sub-point within a CTO\u2019s remit, effective deployment of preventative AI is now front and centre of many businesses\u2019 strategies. <\/p>\n\n\n\n

One of the primary issues that financial services businesses have traditionally faced is that different parts of the customer journey are siloed. So, for example, you may have one internal team and process that takes a customer through the signup and KYC stages, while another handles outbound payments or setting up new payees. Customer data often doesn\u2019t flow smoothly between these different teams and processes, meaning banks can find it hard to build a complete picture of a customer. What are their habits? How do they typically use a bank\u2019s services? What are the early warning signs that they may not be who they say they are? AI tools are now being implemented to allow banks to join these dots together, analysing huge databases with immense accuracy in nanoseconds, enabling them to spot and flag suspicious behaviour as early as possible. <\/p>\n\n\n\n

These large connected databases, only made possible with AI advances, mean that a connected anti-fraud ecosystem has been created. This ecosystem utilises billions of data points to protect consumers around the world behind the scenes, spotting issues before they arise and shielding them from potential harm.<\/p>\n\n\n\n

The trick here is balancing protection for customers and a smooth customer experience. In theory, a business could question every payment and decision a customer makes and prevent close to 100% of all fraud. However, customers would soon get tired of manually verifying every payment and would soon switch to another provider out of frustration. <\/p>\n\n\n\n

The journey to better trust and relationships<\/strong><\/h2>\n\n\n\n

Research revealed that while over half (56%) of all respondents in both the UK and US have been a victim of a financial scam, many still lack the knowledge to detect and distinguish between the various types of financial crime. It’s clear there is a duty of care, and most of all – a need to educate and inform customers on financial fraud risks. This is something that has to come largely from financial services businesses. As always, transparency and demonstrations are key to ensuring that consumers are aware of the risks out there, and are able to protect themselves. <\/p>\n\n\n\n

Our research also found that over half (53%) of US and UK respondents feel safer knowing their bank uses AI to protect them. This is an important statistic that provides further incentive for financial services businesses to use AI – helping them get closer to their customers, and maintaining their trust. <\/p>\n\n\n\n

Financial institutions will always be in a position of power – but as fraud increases and technology advances, businesses that don\u2019t use AI to protect themselves face getting left behind, with customers leaving for those that they feel more secure with. <\/p>\n\n\n\n

The regulatory roadmap<\/strong><\/h2>\n\n\n\n

It\u2019s no secret that regulation is coming to the AI space. Rapid sector growth has meant that AI has been pushed to the top of the agenda for regulators globally, with fraud and financial protection front and center. Indeed, regulators are already taking a pro-innovation approach to ensure that we can integrate AI into a safeguarded, competitive global financial services market that protects consumers. <\/p>\n\n\n\n

We are at a critical inflection point when it comes to AI in the financial services space. As fraudulent practices accelerate globally and regulation starts to form, the next year will see seismic sector shifts. Technology will continue to advance at pace, and financial services companies, whether they like it or not, will have AI impact their business for good or bad. Those that stand still will get left behind, with customer trust bonds waning and fraud cases spiking. Those that continue to invest in the fight against fraud will benefit, both financially but also when it comes to maintaining and building customer trust.<\/p>\n","protected":false},"excerpt":{"rendered":"

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