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Artificial Intelligence

In 2018, there is no escape from AI. Accenture, in a recent report, notes that AI in banking is not new. It is already being used in heavily manual processes for accuracy, efficiency, speed and cost benefits. “What is new, however, is the move of AI beyond process to interaction. The next stage of AI in banking will be towards simple and smarter interfaces,” the report says. These interfaces will also draw on machine learning that adapts to data and interactions to improve areas such as fraud detection. Moreover, banks will tap into AI-enabled tools — like centralised assistants and messaging bots — to better converse with and offer services to customers in the front office. 

Bots

The most prominent use of AI will be in bots. Next time you connect with a bank representative, it might not even be a real person. Instead you could be chatting with a bot (software programme) that understands your needs. Gartner estimates that by 2021 more than 50 per cent of enterprises will be spending more on bots than on mobile app development. In this post-app era, bots will become the “face of AI” and transform the way apps are built. These bots will also, as Capgemini observes in its Top 10 Trends for Wealth Management in 2018 analysis, be entrusted with a wide range of tasks, including helping customers access their portfolio summaries, answering FAQs, identifying new client leads and even automating follow-up. 

Analytics

KPMG, in its UAE Banking Perspectives 2017 report, observes that many banks — in the UAE and globally — continue to make decisions “by looking back at what may have gone wrong”. However, that is changing and firms are leveraging new analytics tools “to predict the future and getting it right”, the report says. “Banks live and die by data, but are internal sources sufficient? The more data-rich the models are, the more accurate they are, which is why local banks have started combining internal bank data with external sources,” the report adds. Industry portal Thefinancialbrand.com asserts in its 2018 Retail Banking Trends and Predictions that the right information analysed in the right way can ensure that the financial institution provides the right offer at the right time, along with a seamless service at a lower cost. 

Big data

Analytics becomes even more powerful when combined with big data, large volumes of data that can be mined by banks for consumer insights, cost savings and better decision making. “It is critical for banks to deliver on the personalisation promise to win the battle of having the best customer experience,” says Thefinancialbrand.com’s 2018 report. KPMG points to the Dubai Data Law (2015) that enables data gathered by Dubai government entities to be shared with the private sector and used for the benefit of the emirate’s residents and visitors. 

Blockchain

In a report titled Leading The Pack In Blockchain Banking, the IBM Institute for Business Value estimates that 91 per cent of banks will be investing in blockchain solutions in 2018. “Trailblazer banks are prioritising blockchains to benefit time, cost and risk in three areas: reference data, retail payments and consumer lending,” says the report. Interestingly, it is not nimble fintech start-ups that are leading the blockchain revolution. “Defying expectations, larger banks are proving they have the agility to move fast in the face of change,” the IBM report says. 

Faster payments

The blockchain tech company Ripple claims it is on a mission to establish an Internet of Value, where money can move like information — instantly. On March 6, it announced that the Japan Bank Consortium — comprising 61 banks and covering more than 80 per cent of all banking assets in Japan — will deploy an app powered by Ripple’s technology, which will allow customers to make payments instantly. Moreover, these payments can be done 24x7, unlike the traditional system where interbank transfers are executed on the same day only if done during stipulated hours and on working days. Ripple was also in the news in February when it announced a partnership with UAE Exchange that will enable “instant, seamless and real-time cross-border payments”.