What is the likelihood of AI based solutions becoming an imperative in financial services and not just a ‘nice to have’? In my earlier blogs I explored the basics of AI and how to implement the technology, now let’s consider the appetite among firms to adopt
We recently completed a survey with Finextra, exploring attitudes towards AI in streamlining payment processes. If I were a betting man, I would have
placed a large bet on there being a different response on key priorities. Within Pelican, we predicted that compliance and security would be top of everyone's agenda.
This was not the case – legacy systems, time-to-market and compliance issues occupied the top spots in the survey respondents’ agendas. This was a surprise at first, but on reflection I can see why this would be a major concern since these elements are so
crucial to future success.
Top of the list was the continuing headache of dealing with legacy systems. In the area of payments processing, repair, routing and investigations were all found to be inefficient. One can almost sense the frustration many banks are feeling because, despite
significant investments in payment processing systems and compliance, they still remain highly inefficient.
It's not the payments themselves that are changing, but the usage, integration and user interface demands. This requires a completely new approach incorporating rich and intelligent interface technologies like natural language processing (NLP) and omni-channel
Looking to the future
So what's next? The $64,000 question has to be can artificial intelligence resolve some of these longstanding issues.
The results of the survey show that a significant number of respondents are clearly on the lookout for new solutions, especially with regard to product innovation and reduced time to market. Sanctions, anti-money laundering (AML) systems, payment repair
and exceptions processing systems are also appearing on their shopping lists.
We were pleasantly surprised to learn that 70 percent of the respondents believe that the adoption of AI will increase significantly in the payments industry over the next two years. There was also strong agreement – 45 percent – that AI has the potential
to address remaining inefficiencies in the payments business. However, there are still a number of adoption hurdles to overcome, as some respondents think that they would struggle to get management buy-in.
In contrast, 38 percent believe that AI can be relied upon, while 11 percent are already using it in their payments processing.
AI and banking
We know that AI is already solving several challenges faced by the payments industry and also reducing many of the inefficiencies – particularly in areas such as sanctions processing, payments repair, exceptions and intelligent least cost routing.
Those customers who are using AI-based solutions have been able to reduce, or virtually eliminate, the high levels of human intervention and manual processing that were previously necessary. This has enabled them to achieve lower costs, accelerate processing
time and reduce errors across the board. Other areas we know are currently being explored include automation of exceptions & investigations and customer retention.
Another area where I believe banks will derive significant benefits from AI will be in product innovation. The vast and invaluable amounts of data banks possess on customer behaviour and preferences can be exploited via machine learning technologies. This
allows invaluable insights to be gained and new, more relevant products and services, to be created.
The use of a knowledge-based approach in combination with the right AI engines can also help ensure time to market is significantly reduced. This will help banks to compete more effectively against the new fintech players and challenger banks. Looking further
into the future, we also feel the use of voice recognition and natural language processing will be a powerful combination to enable greater innovation and a significantly improved user experience.
One theme that ran throughout the survey is that the future of AI is pretty much assured. Indeed, if I were a betting man, this time I would be inclined to place a very large bet that within the next two to three years AI based solutions will be a ‘business-as-usual’
requirement, not a nice to have.