By Princewill Ekwujuru
Artificial intelligence (AI) will remain a frontrunner in the digital transformation process for financial Services Industry (FSI).
Regional General Manager, North, West, East, Central Africa, Levant & Pakistan, Microsoft, Ibrahim Youssry, made this statement while delivering a paper on AI in Africa- a joint project between Microsoft and Access Partnership in Lagos.
He said that no industry will be left untouched by this digital journey, but one sector that is seeing the fastest and most fundamental effects is the FSI.
Youssry stated that FSI players shall be dramatically disrupted by the power of AI – both internally (in the ways they operate) and externally (in terms of dealing with clients and customers).
“Within the next decade, Africa’s objective is to ensure that the next 100 million Africans are financially included. With new technology like cloud computing and artificial intelligence (AI), Microsoft believes the financial services industry (FSI) can achieve this.”
Quoting a 2018 World Economic Forum (WEF) report, he stated further: “The New Physics of Financial Services unpacks this phenomenon at length, but one high-level take-away is that the AI changes here cannot be overstated. The long-term impacts of AI are radical and transformative, putting the FSI ecosystem into a period of reorganisation.”
Competition from the underdogs
The Regional General Manager said that FSI has traditionally been dominated by large and established corporations, often with extensive heritage and market dominance. Through this, many FSI companies have enjoyed relatively low competition for customers, and have been slow to innovate and change ‘with the times’.
Enter the levelling power of the cloud, accessible analytics and machine learning, and we see how a scrappy, determined fintech startup can disrupt a whole market or sector.
Many of these startups offer alternatives for banking, payments, transfers, payroll, credit, and other financial services. 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, 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. Recent studies suggest that approximately 40 percent of African banking customers prefer to use digital channels for transactions over branch channels.
Added competition is good for the entire industry, and customers will benefit from new and improved technologies that change the way the industry interacts with them and meets their expectations.
AI at the core of digital transformation
But just what form do these advances take? AI lies at the heart of things like chatbots, advanced customer credit assessment, relationship management, security, anti-money laundering and fraud detection.
Chatbots draw from big data and machine learning to respond to customer queries and concerns. They can streamline customer support on routine services like banking transactions, and make product recommendations.