The time when banks were just financial institutions authorized to receive deposits and make loans is long gone. At present, banks go way beyond just storing currency, changing their mindset in order to gain trust and as many customers as possible. They finally realized that today it’s not all about the money, it’s all about innovation and how one reaches a high instance of it. Thus, banks from all around the world have turned to artificial intelligence and biometrics in a bid to streamline the identity verification process, to improve customer experience, enhance security, and lastly, to be perceived as innovation drivers. Financial institutions have also started to adopt a vital role in the consumers’ lives by providing the means for digital identity.
In order to gain a competitive edge over the ‘young and beautiful’ fintechs, and keep up with the trends, incumbent banks have started to implement the most trendy and fancy technology that everybody is talking about these days: artificial intelligence. The Future Workforce Survey – Banking report by Accenture has revealed that 75% of banking CXOs agree on the fact that adopting artificial intelligence would be critical to their organization’s ability to differentiate in the market.
JPMorgan Chase has deployed a Contract Intelligence (COiN) platform designed to analyse legal documents and extract important data points and clauses. The manual review of 12,000 annual commercial credit agreements normally requires approximately 360,000 hours. Results from an initial implementation of this machine learning technology showed that the same amount of agreements could be reviewed in seconds.
Likewise, Bank of America Corporation has now its own intelligent virtual assistant named Erica, which leverages predictive analytics and cognitive messaging to provide financial guidance to the company’s over 45 million customers.
What’s more, solution providers have noticed the banks’ deep commitment to leveraging advanced technology to drive innovation, so they have started to close strategic partnerships and investments. The increasing digitization and automation of financial services have determined many financial institutions to augment their biometric and AI-led service offerings. For instance, Citi has recently partnered with Feedzai to employ the company’s monitoring transaction solution, and it has also upgraded its mobile banking app with biometric features.
The biometric authentication has gained momentum throughout this year, many financial institutions partnering with biometrics providers. Moreover, Lloyds Banking Group and a large Czech bank, Ceská sporitelna of Erste Group have teamed up with Nuance Communications, a biometrics and conversational AI company, to deploy a voice biometrics solution. BBVA, HSBC, Nordea, Bank of Montreal, State Bank of India are just a few examples of bank that have implemented biometrics into their platforms to boost customer experience.
Digital identity and KYC
Countries around the world have created national ID schemes, building a strong relationship between the private and public sector, while also helping citizens to manage their online accounts and skip the visits to the bank’s branches. According to John Erik Setsaas of Signicat, a true eID should be omnipresent, and should be used for many different purposes. Examples of this include digital banking, insurance, healthcare, and interacting with government services. Furthermore, Signicat’s report The Battle to On-board 2 states that people are very comfortable with the idea of banks as identity providers. Other benefits consist in the fact that users have only one login to remember and that the cost of maintaining the infrastructure can be centralized. At the same time, this benefits the business, who no longer needs to worry about user verification, as this is done by the eID scheme, and due to the centralized management, there are fewer security incidents to worry about.
Moreover, banks and solution providers have been struggling to improve the Know Your Customer processes and meet the regulatory standards with intelligent tools for both consumers and organizations. BNP Paribas, ABN AMRO, Deutsche Bank, Nordea, Standard Chartered, Raiffeisen Bank, RBI are banks that have been involved in consolidating the KYC infrastructure. As highlights in this space, BNP Paribas, ABN AMRO, and Deutsche Bank have completed over 300 transactions on a KYC application built on R3’s Corda blockchain platform. DNB Bank, Danske Bank, Nordea Bank, Svenska Handelsbanken and Skandinaviska Enskilda Banken have set up a joint venture, Nordic KYC Utility, with a focus on developing a secure and cost-effective Nordic KYC infrastructure.
Closing remarks
The banking industry is currently trading an untold wealth, and the customers’ demand for convenience and security will make them move forward and bring services that are even more outstanding. Because what happens behind this whole industry’s scene is something called science – and science is not static.
To learn more about the latest trends into fraud detection, digital identity and customer onboarding, check out our Web Fraud Prevention, Identity Verification & Authentication Guide 2018-2019. In addition to insights into innovation taking place in the fraud management space using machine learning and Artificial Intelligence, the guide also contains a mapping that features some of the main players in the industry whose goal is to continue the fight against fraudsters, as well as to contribute to the improvement of the customer experience.
Also, make sure you check out our first installment of the 2018 retrospective, on the fraud prevention landscape – as pictured in 2018.
We hope you enjoyed our headlines retrospective for 2018, and we want to take this opportunity to thank you for following us and reading our stories this year! Don’t forget to subscribe to check out more insights and relevant pieces in the upcoming year.
Happy holidays from The Paypers!
About Anda Kania
With a high interest in the latest news of the payment and fraud industry, Anda has used her position of senior editor at The Paypers to discover and analyze the hottest topics and to discuss with the top thought leaders in the domain, in order to get the pulse of the fraud and digital identity industry. With a Master’s Degree in International Relations and National Security Studies, Anda is in a constant search for the upcoming trends and the best way to comprise it in words for our readership.
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