Providing seamless, omnichannel customer experiences is essential for competitive financial business. But the digital world also brings a multi-layered challenge: safeguarding the business and its customers from relentless attempts at financial crime.
Regulators now require banks to absorb the costs of fraud for real-time transactions and processes, so the pressure is on to identify, manage and mitigate risk more efficiently. The problem is, many of the rules-based fraud prevention processes in place today are yielding over 90 per cent false positives, requiring legions of investigators to spend time manually reviewing alerts. Tightening the model to reduce the number of false positives would also increase the likelihood of missing real fraudulent activity.
Cloud and artificial intelligence (AI) technology are the key to resolving that challenge. According to McKinsey & Co, banks that invest in data-aggregation, process automation and advanced statistical modelling using machine learning and AI can decrease compliance-error rates from over 30 per cent to less than 5 per cent and cut false-positive alerts to below 50 per cent.
Financial firms recognise this opportunity. “In the fast-changing, tech-driven world banks now live in, they recognise that technology can play a role in helping them meet both their customers’ expectations and challenging regulatory requirements,” writes Bill Borden, corporate vice president of worldwide financial services at Microsoft in an industry blog. “The industry has a tremendous opportunity to accelerate the use of cloud and AI as a catalyst to improve competitiveness, drive growth, elevate customer experiences and keep ahead of changing regulations and cybersecurity threats.”
In Hong Kong, for instance, HSBC is building new services in the cloud to enable better organisation and analysis of its data and make more core customer journeys and features available in a mobile-first environment – while delivering bank-grade security. The bank’s PayMe for Business ap ..
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