Artificial intelligence (AI) is having a major impact on the financial sector. Fintechs are using AI to develop new products and services that are transforming the industry. From chatbots that provide customer support to automated investment systems, AI is revolutionizing the way financial services are delivered. Perhaps most importantly, AI is helping financial institutions to become more efficient and effective. What does this mean for cross-border payments?
This piece is posted in Fintech Finance and discusses AI in the cross-border payments space, with various benefits increasing for the use of this latest gen tech. We have been providing member research in this area as it relates to various uses across financial operations in treasury management functions. The greater the adoption of digitized systems and processes, the more data that is made available for the nuanced algorithms that can help to reduce human intervention, which translates to lower cost and faster processing.
‘Recent research by IBM shows global uptake of AI is becoming more prevalent across all industries, with over a third (35 percent) of businesses reporting its use in 2022 – a four-point increase from the previous year. Another study by Nvidia has found that 37 percent of financial services companies plan to use AI in order to gain a competitive advantage. What’s clear from these figures is how AI has spread across multiple business practices, with fintechs investing time and resources in AI as a means to differentiate themselves from competitors.’
In addition to the speed of transactions the author also touts the potential improvement in the security of cross-border transactions as well. This happens through AI’s ability to monitor suspicious patterns across a network and prevent fraudulent cross-border payments, keeping the money where it belongs and reducing reputational and regulatory risk as well. So once again the continued addition of digitization to financial processes allows for the broader and more effective use of various other tools that improve overall company performance.
‘“AI’s value from a security perspective extends to Anti Money Laundering (AML) screening processes. Financial providers are now developing technology that can verify transactions automatically, which removes the possibility of human error and also reduces processing time, since manual checks are no longer required,”….Naushad concluded, “AI is now established as an essential component for financial services and the companies that provide them. Companies that downplay AI’s significance will quickly be left behind by more enlightened, forward-thinking competitors who have taken the time and the effort to invest in and integrate AI into both their customer-facing products and services and their back-end systems.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group