< Back to Articles

Artificial Intelligence Is Transforming Banking As We Know It

1 Sept 2019
Artificial Intelligence Is Transforming Banking As We Know It

Traditional banks and FinTech companies are often portrayed as rivals that are in constant opposition for popularity and new customer acquisition. This notion is not entirely false, especially when considering that some of their paths rarely meet such as with disruptive digital-only banks. However, innovative technologies are emerging at a rapid pace and their impact on banking is felt at an almost-daily basis. Artificial Intelligence (AI) happens to be at the forefront of this impact, eventually leading to inevitable change in the finance sector.

                           

From complex machine learning applications to combat money laundering and automated big data processes for fraud detection to customer service chatbots, smart contracts and credit scoring, people have probably already interacted with banking AI software without necessarily knowing it. Here are some of the most happening banking areas that AI is changing:

             

Customer Support & Front Office

             

Although consumer-centric digital banking technically dates back to the 1960s with the introduction of ATMs, today we see that clients’ customer support expectations haven’t really changed since then. Millennials are often blamed for “killing” industries and that includes brick-and-mortar banks, and in the present they can hardly be held accountable for not wanting to engage wit banking services except at a digital level. AI-powered chatbots, voice assistants and smarter-than-regular applications are now the norm in the digital age, and this impact is further amplified into the future by AI-enabled biometrics and similar state-of-the-art solutions.

             

Fraud Protection & Middle Office

             

Security of funds and fraud countermeasures are still an ongoing concerns when it comes to digital finance, and artificial intelligence might be the one application that actually revolutionized this area, commonly known in the industry as middle office functions. Middle office is where banks and financial institutions perform risk management and security processes, including fraud detection, anti-money laundering efforts and KYC verification to identify customers; platforms that have all greatly benefitted from AI incorporation into their systems.

             

Lending and Risk Management

             

                When U.C. Berkeley researchers published a study called “Consumer-Lending in the FinTech Era”, there were two major takeaways from it; firstly, FinTech lenders were revealed to discriminate less than overall lending firms by about one-third, whereas secondly, discrimination still occurs at variable levels. Enter AI applications that ought to enable more equitable credit underwriting in the future, providing that existing AI algorithms will be constantly fine-tuned to make that happen. Expanding beyond lending, AI has also affected risk assessment and management in banks.              

             

For now, artificial intelligence is positively contributing to a seamless, more efficient e-finance age that is still experimental in some aspects. However, banking and financial services are bound to be safer and more secure as we move forward into the future.

related articles

19 June 2022

FinTech Egypt releases its FinTech Investments-focused H1 2022 Landscape Review “Why Egypt is a promising market for FinTech Investments?”

26 June 2022

The Women Techsters Initiative Fellowship Class of 2023

10 June 2022

We're bringing top LPs and GPs from around the world

10 June 2022

The Egyptian FinTech ecosystem is booming

10 June 2022

We've joined forces to bring the best LPs and GPs together

9 June 2022

We're taking a closer look at Egypt

9 June 2022

Come and join the key players in the Middle East & Africa’s VC market

8 June 2022

Connect with Egypt

8 June 2022

Frontier of Egypt, Africa & the middle East in the 2022

8 June 2022

Egypt’s First VC Summit kicks off in partnership between GIZ Egypt, AfricaGrow and Fintech Egypt

21 March 2022

BANQUE MISR, NATIONAL BANK OF EGYPT, AND BANQUE DU CAIRE LEAD INVESTMENT IN NEW FINTECH FUND

21 March 2022

The Increasing Influence of Women in FinTech

23 January 2022

FinTech Egypt is releasing the first comprehensive report of its kind providing an overview of the unprecedented growth of FinTech in the Egyptian market

4 January 2022

5 FinTech Trends to Follow in 2022

13 December 2021

How FinTech is Disrupting an Age-Old Industry

13 December 2021

RESHAPING FINTECH WITH AI: TOP AI INNOVATIONS IN THE FINANCIAL INDUSTRY

6 September 2021

Accelerate’ha’ Female-Focused Problem Statements Now Live!

6 September 2021

Breaking Entry Barriers for Women in FinTech

6 September 2021

Have Traditional Banks Realized the Full Potential of Fintech By Now?

9 June 2021

Episode 5: Accelerating FinTech Innovation through Open APIs

21 April 2021

Episode 4: Understanding Blockchain’ s Potential in Disrupting FinTech

22 March 2021

Episode 3: Discovering FinTech Talent through “FinYology - FinTech for Youth”

25 February 2021

Episode 2: The Current & Future state of FinTech during COVID-19

25 February 2020

FinTech Egypt Dialogue podcast launches its first-ever session about E-KYC Regulations and Regulatory Sandbox

6 April 2020

Where does Artificial Intelligence fit in FinTech?

10 March 2020

Critical FinTech Questions That Only the Near Future Can Answer

2 Sept 2019

Special Interview With Dor-E, Winner Of The AI-Customer Experience FinTech Innovation Challenge

2 Sept 2019

Egyptian Banking Institute Announces “The Future Of FinTech And Latest Digitalization Trends” Field Trip

1 Sept 2019

Artificial Intelligence Is Transforming Banking As We Know It

30 July 2019

Hub71 Partners With Techstars In Launching An Accelerator Program To Boost Startups

22 July 2019

FINTECH IN THE SAVANNAH: Afro-Asia FinTech festival 2019 that took place in Nairobi Kenya

22 July 2019

How Machine Learning Supports Credit Profiling

10 July 2019

The Central Bank of Egypt’s Regulatory Sandbox started its first cohort in “e-KYC” to empower the FinTech ecosystem in Egypt.

9 July 2019

Dubai Smart City Accelerator invites Egyptian startups to join Cairo Fast Track

3 July 2019

Calling All Egyptian FinTech Startups To Participate In The Afro-Asia FinTech Festival!

25 June 2019

Paynas Wins Big At Seamless North Africa 2019

11 June 2019

Seamless North Africa 2019

11 June 2019

Announcing The Inaugural AFI FinTech Showcase

11 June 2019

Fintech Trends In 2019 - Blockchain Adoption

11 June 2019

Discounted Start-Up Passes

FinTech Newsletter

Sign up to our newsletter to stay up-to-date on the latest fintech news and events.

Subscribe