As part of its «Smart Nation» pursuits, Singapore launched its National Artificial Intelligence (AI) Strategy at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) conference. Within the next three years, AI-powered chatbots will become the first point of contact for residents to report issues with city services while marking systems in schools will soon be automated.
Across the financial landscape, AI has also weaved itself into the workings of the industry. According to a report by Microsoft and IDC, more than half of the financial services companies in APAC have adopted AI as part of their growth strategies. Better customer engagement, higher competitiveness, accelerated innovation, higher margins, and improved business intelligence are amongst the benefits the financial industry can expect to reap from AI.
AI is Revolutionizing the Financial Landscape
AI will enable financial services companies to redefine how they work, how they create innovative products and services, and how they transform customer experience.
In insurance management, AI systems support the automation of underwriting and claims management process while auto insurance is increasingly rolled out. Intelligent trading systems leveraging predictive analytics and data mining with AI can produce more accurate stock performance forecast for data-driven investments. In the payment industry, deep learning technologies can be tapped on for risk analysis to produce qualified risk decision. Fraud prevention with the support of AI capabilities enables real-time detection of fraud attacks and provides latest risk scores to fraud analysts.
By tapping on AI, credit solutions can be tailor-made to suit customer needs through flexible and rapid digital loan-approval processes. Last year, Wirecard introduced an AI-based credit assessment and decision system that is directly integrated into Wirecard’s digital payment infrastructure.
Powered by AI, real-time evaluation using data from long-term business relationships in the area of payment processing allows Wirecard’s B2B customers to benefit from uncomplicated loan-approval decision-making processes and shorter waiting times for loan disbursements.
Finance Industry Goes Digital and Cashless, With the Support of AI
Technology is changing consumer habits – Forrester reports that 77 percent of consumers in APAC prefers to bank digitally. Consumers today are expecting more from their financial service providers.
In October 2019, Wirecard launched boon Planet, the first payment app with neo-banking services. Users can manage their entire everyday financial life within the app and will benefit in the future from additional services such as insurance, mobility, and loyalty features, along with additional financial services.
With the support of AI, the financial industrye rise of fintech has been a massive disrupter in the banking and finance industry. Fintech investments in Singapore this year has just crossed the billion-dollar mark in September. Singapore’s move towards a cashless society is picking up pace as both incumbent banks and fintech companies are responding to rising consumer expectations.
The Monetary Authority of Singapore (MAS) has announced its plans to distribute Singapore’s first digital bank licenses. can scale up the benefits of fintech. For example, the use of AI will transform personal banking services into a personalized service for every customer. Banks and insurance companies in Singapore are also rolling out AI-driven financial planners which track customers’ cash flow trends and offer personalized financial advice according to their various life stages and needs.
Mobile payment is gaining grounds, with the number of PayNow – a peer-to-peer funds transfer service – transactions reaching five million in July this year. The adoption of AI with deep learning will enable the payment industry to achieve a competitive edge. Facial recognition technologies and biometric identification will revolutionize checkout-processes. It will make cashless payments more secure and drive the demand of virtualized payment instruments.
In e-commerce, AI technology opens up new possibilities for merchants to reach their customers as smart data can be tapped on in targeting offers and advertisements to consumers.
Financial Landscape Must Prepare for the Integration of AI
At the SFF x SWITCH conference, Singapore announced a new initiative to promote responsible AI use in the financial sector. Developed in collaboration between MAS and industry leaders, the framework known as Veritas is set to bring about a progressive and trusted environment for AI adoption within the financial sector.
As the industry moves to digital platforms and societies transition to a cashless economy, the financial landscape must make room for the role of AI. With AI as a trusted partner, growing transaction volumes and the ensuing data explosion can be transformed into financial intelligence to empower the finance industry to keep pace with consumer needs. Regulatory, governance and legacy systems of the financial industry have to be ready for AI’s inception.