Artificial intelligence (AI) and the emergence of machine learning are rising as some of the top technology trends today, and they’re quickly making in-roads into the financial services sector. For example, banks and other financial institutions looking to improve customer experiences are turning to AI-enhanced chatbots to assist with simple online banking tasks, or are using AI to flag unusual spending patterns and in automation to help institutions meet regulatory and compliance requirements. The growth of artificial intelligence in financial services isn’t slowing anytime soon: In the 2017 Economist Intelligence Unit report, Artificial Intelligence in the Real World, 75 percent of more than 200 business executives surveyed said AI would be actively implemented in their companies within the next three years.
Open Banking and APIs
So, how artificial intelligence in financial services companies derive value in an increasingly competitive world? One aspect is in security. Regulations such as PSD2 and CMA along with market demands have forced established banks to open up customer information to third party providers via APIs. APIs While providing consumers greater choice in who and how they bank, has unfortunately increased the opportunity for fraud. The fraudsters have become increasingly sophisticated. With the progression towards a more connected and API-driven world, deploying API cybersecurity solutions go beyond access control. Centralized API management leveraging an AI engine extends API security.
Speeding Up Fraud Detection
The industry has long used algorithms for fraud detection, which is rule based and resulted in a plethora of false positives, causing wasted hours of investigation. Along higher with false positives, rule based fraud detection systems do not detect some forms of API deception. When using artificial intelligence in financial services to support fraud detection, computers are enabled to learn from interactions without having to be reprogrammed or needing to rewrite algorithms, ultimately helping banks stay one step ahead of the fraudsters by allowing for deep API traffic visibility. With the progression towards a more connected and API-driven world, deploying API cybersecurity solutions go beyond access control. Centralized API management leveraging an AI engine extends API security.
Read also how Elastic Beam protects an API infrastructures and digital assets with AI-driven software.
The use of artificial intelligence in financial services is not a panacea for all the woes in financial services; however, it will become a foundation for offering competitively differing technology in the enterprise. Solving real business problems with the help of AI and machine learning is already well underway – boosting customer interactions, supporting proactive fraud identification and assisting with regulatory compliance are just a few ways that financial institutions are currently benefiting from the AI and machine learning revolution. Banks and insurance companies are continuing to find and solve new business problems using artificial intelligence, and the possibilities are endless.