Technology for more human-centred financial services

Anna Muzalska from Quidgest explains how AI has revolutionised the way regulated FIs are equipped with leading-edge, secure, and efficient management information systems adjusted to international requirements, specifications, and emerging new market trends.

Quidgest has been a pioneer in the area of AI applied to software development since its establishment, in 1988. Thanks to its extreme low-code platform Genio, Quidgest revolutionised the way software is produced, providing its clients worldwide with leading-edge management information systems in Banking, Insurance, and Financial Services.

Our solutions cover Analytical Credit Dataset (AnaCredit), Common Reporting Standard (CRS), Foreign Account Tax Compliance Act, Banking Regulatory Reporting (BRR), Anti-Money Laundering (AML), Loan Management, Management of Participations, Models Managing and Assets Evaluation, Reports European Single Electronic Format (ESEF) Solvency, Scoring or Simulators.

These solutions support banking and financial institutions in managing and complying with complex (often changing) regulations. We understand their pains, their challenges, and find better ways to solve them with a high degree of efficiency. We have a team that not only delivers solutions but also provides training and advice on regulatory obligations. And all according to international requirements/specifications, and emerging new market trends.

In recent years, users have been moving away from traditional brick-and-mortar banks and using online and mobile platforms to manage their financial accounts and transactions. This shift has been driven by a range of factors, including the increasing availability and convenience of online and mobile banking services, as well as the proliferation of fintech companies offering innovative and user-friendly financial products and services.

In addition, there have also been some important regulatory updates related to cybersecurity, AML, and the prevention of financial crime to ensure that financial institutions have robust systems and controls in place to identify and prevent cyber risk and financial crime (CyFi), and other illegal activities. These changes have had a major impact on the industry and have helped to shape the way that financial services are provided and accessed by consumers.

Numerous changes! Regulated financial institutions have improved their customer journey and are now offering a more coherent and seamless experience across different channels (online, in-person, or remote). They strive to listen to the feedback/concerns of their customers, ensuring that their needs and preferences are being considered at the risk of losing them to strong competition.

Many customers now view financial services as just another product to buy. This shift in perspective has led to a greater emphasis on price and convenience, as well as a growing demand for personalised solutions that meet specific needs and goals. Staying up-to-date with the latest trends and developments, adopting an approach ‘try and learn’, and adapting to constantly changing regulations and market conditions, is also crucial for financial service providers in today's dynamic and competitive environment.

Legacy systems in use for a long time also pose big challenges, because they are not able to keep up with changing regulations or consumer demands (new forms of payment, new security features, etc.). Finally, I’d like to mention the challenges related to recruiting, retaining, and (re)training professionals to work with the new reality in financial institutions – now forced to identify the the existing skills gap rapidly, and develop a motivation and training plan tailored to their specific needs.

Banking and fintech industries are increasingly taking advantage of newly available technology, such as AI and machine learning algorithms, to improve fraud detection and prevention capabilities, ensure secure and efficient digital onboarding, and automate tasks in customer service and credit scoring.

Technology also allows leaving behind outdated legacy systems unable to keep up with the rapidly changing financial landscape. By investing in agile systems that are prepared to change and evolve, financial institutions can improve their efficiency and competitiveness, and better meet the needs and expectations of customers.

But despite the increasing use of technology, there is an irreplaceable need for human intervention in financial services, since humans are able to understand and respond to complex situations in ways that computers and algorithms cannot. Financial institutions should maintain a focus on providing high-quality customer service and support and ensure that customers have access to trained and helpful professionals (with technical know-how, but also empathy, emotional intelligence, and intuition, among other interpersonal skills). Professionals who can interact effectively, work well as a team, and better serve their customers – not simply executing, but controlling, monitoring, thinking critically, and building strong relationships with them.

Financial institutions will continue to use advanced analytics, machine learning, AI, and other technologies and digital capabilities to improve the accuracy and efficiency of their transaction monitoring and KYC processes. This will involve using digital platforms, self-service tools, and providing personalised and tailored support to customers. It will also help to close the AI skills gap created by a shortage of trained data scientists or software engineers.

In this context, regulatory bodies and committees that oversee the financial industry may be tasked with ensuring that new technologies are used safely, securely, and compliant with industry standards and regulations. This may involve the development of new guidelines and best practices for the use of technology (blockchain, cloud computing, or the collection/use of financial data). Here, I highlight the critical contribution of authorities such as AMLA to a forceful and coherent fight against money laundering and terrorist financing in Europe. This has allowed enforcement agencies, sectors, and industries to share information and work together to update their domestic legislation on regulatory obligations periodically.

Anna Muzalska is currently Head of the Banking, Insurance, and Financial Services department at Quidgest. In her career, she combines 15 years of IT experience plus over 10 years of helping financial institutions deliver their regulatory reports and meet their AML obligations.