Risky Business: When FIs Make AI A “Black Box”

From giving consumers in the developing world access to mobile and online banking capabilities to pushing banking tech forward in hopes of creating a new world of intelligent applications, digital banking technology is turning the financial industry on its head.

And with the use of artificial intelligence, financial institutions (FIs) are also equipping consumers with an arsenal of new banking options.

In the April edition of the Digital Banking Tracker, PYMNTS explores the newly debuted features from around the space, and around the world.

Around the Digital Banking World

Digital banking services seem to finally be gaining traction in many emerging markets.

In Jamaica, for example, where more than 50 percent of the adult population now has access to the internet, a growing number of consumers are embracing digital banking technology. More than half of consumers (65 percent) now own a debit card, and a growing proportion are using online portals to pay bills and make purchases, though security concerns remain.

And in Africa, a pair of banks is hoping to improve access to digital banking technology to local consumers.

Standard Chartered Bank, for one, recently debuted its first-ever digital offerings in the Republic Côte d’Ivoire, becoming the first digital bank to open shop in the country. And in Nigeria, Wema Bank recently debuted the country’s first completely digital account creation process via its online subsidiary, ALAT. Its tech-centric offering has already attracted 175,000 customers, and the bank is hoping that online account creation will bring more connectivity-coveting Nigerians to its customer base.

Across the Atlantic, Canada’s Bank of Montreal is using artificial intelligence to bolster its customer service. The company recently unveiled new chatbot features on its Facebook and Twitter pages, with bots designed to answer customers’ inquiries about account balances or money transfers.

OCBC Doubles Down on AI Development

But the Bank of Montreal isn’t the only FI focusing on AI development.

Singapore’s OCBC Bank recently announced the creation of an AI lab to specifically target the creation and integration of new AI-powered capabilities. OCBC Bank will invest $10 million in research and development over the next three years, according to the announcement, tapping Ken Wong to lead the group.

In a recent interview with PYMNTS, Wong explained why the company felt the time was right to create a team and facility dedicated to AI — and the goals in store for the AI lab.

“The more we work with different FinTech organizations, the more we realize that if we don’t take on a more active role in AI, a lot of this technology and these solutions will become a black box for the bank,” Wong said. “So, we believe AI is an area [in which] we, as a bank, should build up some internal skillsets.”

To read the full story, download this month’s edition of the Digital Banking Tracker.

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About the Tracker

The Digital Banking Tracker, powered by Feedzai, brings you the latest news, research and expert commentary from the FinTech and consumer banking space, along with rankings of over 300 companies serving or powering the digital banking sector.