Highlights by iFX EXPO Asia 2023: AI is a new driver for the financial industry
Verigram attended the iFX EXPO Asia 2023 fintech expo in Bangkok. In this article, we share some highlights from the discussion on the impact of AI.
The banking industry has seen several revolutions throughout history, each of which has had a major impact on the way people bank. The introduction of paper money in the 17th century, for example, made it easier for people to carry and use their money. The ATM, which first appeared in the late 1960s, revolutionized banking by allowing customers to access their accounts and conduct transactions without having to visit a branch.
The 21st century is already being called the "era of artificial intelligence" in banking. AI-powered technologies are being used to automate tasks, personalize customer experiences, and improve fraud detection. As AI continues to develop, it is likely to have a profound impact on the banking industry, making banking even more convenient, efficient, and secure.
A New Era in Financial Services
According to a market report by Mordor Intelligence, the value of artificial intelligence (AI) in the financial technology market was valued at $7.91 billion in 2020 and is projected to grow to $26.67 billion by 2026. Furthermore, the market is expected to maintain a steady compound annual growth rate (CAGR) of 23.17% during the forecast period from 2021 to 2026.
The most significant aspect of these technologies is their ability to minimize transaction costs to an unprecedented level. Traditional banking processes involved voluminous paperwork, manual verification procedures, and labor-intensive tasks, resulting in higher costs that were inevitably passed on to customers. However, the integration of fintech solutions has automated and streamlined these processes, resulting in significant savings for financial institutions.
The convergence of financial technology and artificial intelligence is a hot topic of discussion around the world, as artificial intelligence brings both unique opportunities and risks. Our colleague Uahat Bastimiev, co-founder of Verigram, participated in a panel discussion on this topic.
Watch the recording of the panel speech:
The role of Artificial Intelligence in FinTech
At the heart of this transformation lies the utilization of AI in FinTech. AI's capabilities have enabled several significant developments that have revolutionized finance:
- Automation of Processes: Financial transactions still require a lot of paperwork and today an important step in reducing these procedures is the recognition and export of documents. Know-your-client (KYC) procedure is already significantly speeding up financial transactions and saving banks money. For Verigram clients, it is enough to take a picture of a document and a person through the application and immediately get access to services.
“One of the popular automation services is the implementation of KYC processes online. It is a procedure when you transfer your data to the bank and confirm with the help of a smartphone camera that it is you. AI checks whether the documents match the person in the video. In particular, such services are offered by Verigram. We can say that the time savings are significant. The client does not need to go anywhere, and the bank operator does not need to reprint the data from the ID. Everything is done automatically,” — Uakhat notes.
- Enhanced Security and Fraud Detection: AI algorithms are adept at analyzing vast amounts of data in real-time, enabling them to quickly and accurately assess the legitimacy of clients. It used to take several days, but now it takes several minutes. They can cross-check client information with law enforcement databases and sanctions lists, helping financial institutions mitigate risks associated with fraudulent activities such as money laundering and financial scams.
“At present, the main points of AI implementation are the acceleration of processes and the personalization of financial offers,” — says Uakhat Bastimiyev. Most often, AI is applied for behavioral analytics, which allows banks and financial organizations to select the most suitable offers for customers. For most people, these technologies are invisible because they are neatly and natively embedded. “For example, in Kazakhstan, we no longer notice when an adequate insurance service is selected for us or a credit limit is calculated. Such a level of technology is not yet available in all countries,” — Uakhat emphasizes.
- Personalization of Financial Offers: By analyzing transaction history, spending patterns, and creditworthiness, AI algorithms can calculate suitable interest rates, credit limits, and even offer exclusive deals to enhance customer satisfaction and loyalty.
- Accelerated Processing of Unstructured Data: The financial industry generates an enormous amount of unstructured data from diverse sources. AI-powered tools excel at swiftly processing this data, extracting valuable insights, and making it easily accessible for decision-making purposes.
- Predictive Analytics for Investment Instruments: AI-driven predictive analytics has revolutionized the investment landscape. Financial institutions now use sophisticated algorithms to analyze market trends, assess risk factors, and make informed investment decisions, maximizing returns for their clients.
Data Privacy Concerns and Digital Identity
Experts have called access to personal data one of the main threats posed by digital identity. Kaia-Reet Parv, Chief Investment Officer from CrediLinq.AI has reminded us that "whatever you post on ChatGPT is public information." Companies, employees, and ordinary citizens all need to be aware of the need to filter the information they send to chatbots. This is a matter of particular importance.
Uakhat Bastimiev has said that "one day you will have your own digital identity that you can use to grant access to various services such as Uber and others. It is important that this digital identity remains safe."
Is it possible to give up digital identity? To what extent do the possibilities of its use outweigh the risks?
According to a World Bank report, 850 million people still do not have identity documents. These undocumented people are denied access to government, financial, or medical services. A digital profile could solve this problem.
European countries, countries in Asia, Africa, and Latin America have different views on this issue. For example, European countries in most cases only accept a passport or ID card as proof of identity and require the physical presence of a person in the same bank or government agency. A person without a physical document immediately loses access to services. Other countries, on the contrary, are more actively implementing a digital profile. Biometric technologies such as face or fingerprint recognition are used to verify identity.
Artificial intelligence (AI) systems can analyze huge amounts of data in real time. They are able not only to recognize documents and faces, but also to analyze human behavior. This strengthens the security of digital identities and speeds up access to services.
However, the use of AI in digital identity comes with more than just data access risks. Of great concern is the tracking and profiling of individuals, as well as possible biases and errors in the identification process. The thoughtless and uncontrolled use of AI can lead to discrimination when applying for a job or when issuing loans.
It must be admitted that cybercriminals are also actively looking for ways to cheat the system. AI-powered deepfake technologies can create realistic fake content to impersonate another person and gain access to services. Today, most systems such as Verigram do not miss such attempts, but the struggle between evil and protection does not weaken for a day.
iFX EXPO Asia 2023
The exhibition, which took place at the end of June, was dedicated to digital technologies in the field of finance. It gathered an audience from Southeast Asia, Europe and the Middle East.
The reports and discussions of the event primarily about technologies in the field of trading, prospects for the development of the crypto industry and WEB3, innovative achievements in the Asian region and their impact on the financial world. Separate sections were devoted to legal regulation and new risks in this area.
Among the big guests were representatives from Revolut, Binance, Coinbase, Visa, Salesforce.
Biometric Verification from Central Asia
Digital technologies from Kazakhstan were presented for the first time at iFX EXPO ASIA 2023. Verigram was the only representative from the region.
Our team demonstrated biometric verification services and ways to repel fraudulent attacks. We learned that for financial organizations the quality of liveness checks is a problem. The performance of our Liveness detection surprised the experts.
We thank iFX EXPO for the opportunity to show our AI-powered eKYC technologies and participants for insights from the financial industry!