BANKING INDUSTRY PLANS TO SPEND ADDITIONAL $31 BILLION ON AI TO REDUCE FRAUD

Sun 07 August 2022:

Banks globally are estimated to invest an additional $31 billion on artificial intelligence (AI) incorporated in existing systems by 2025 to reduce fraud, according to a survey,

According to the IDC report, fraud management is a high concern for banking executives globally.

“In the process of coming up with digital products and services, new channels, and new payment methods, businesses might be overestimating the adequacy of their current defense mechanisms against fraud,” said Michael Araneta, Associate Vice President, IDC Financial Insights.

“What worked well before simply would not be enough now in the more digital world of business. There needs to be a constant upgrade of fraud management capabilities,” Araneta added.

The banking industry is amid two crisis scenarios, each side requiring solutions that can run counter to each other.

“Government policy has to manoeuvre, and financial services institutions — banks, insurers, capital market firms — must balance between the chase for revenue and risk management,” said Araneta.

By 2023, the industry will also be into platform-building, which allows financial services to be externalised and extended to third parties.

Araneta further explained that, “The industry is pursuing new collaborations like banking as a service (BaaS) and digital lifestyle ecosystems. What is very clear is that being digital-first means being attuned to the unique moment in the recovery of financial services.”

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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