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BANKING

By ALEXA BUECHLER

F

rom security to customer service, artificial intelligence is changing the way we do banking. Artificial intelligence, or AI, is technology that makes it possible for machines to learn from experience and to perform tasks that would typically require human intelligence. The use of this technology has become increasingly popular in banks and play a heavy role in FinTech companies, which are companies that aid businesses with financial technology, including technological innovation of payments, and the automation of lending and borrowing. The intersection of banking and technology, such as artificial intelligence, most prominently appears in fraud management and customer service. But the biggest impact on the sector? Analysts estimate that AI will save the banking industry more than $1 trillion by 2030. “The banking industry can benefit from using artificial intelligence to combat fraud and to personalize a client’s experience in real time,” said Cathy Cooper, executive vice president and retail banking group manager for Washington Federal. “It could also be used to proactively offer products and services to consumers based on factors that may not be obvious or as simple as demographic segmentation.” “For example, there’s a strong correlation between owning a dog and buying your first home. Artificial intelligence tools could search for purchases of dog food and use that data to target an offer for a no-fee home loan,” she said. “Being able to use artificial intelligence requires that banks find a way to make their data accessible across siloed platforms, and that can be harder for community banks if they use outside vendors to host services.”

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REDUCING FRAUD Amy Zirkle, global payments expert and interim CEO of the Electronic Transaction Association, said technology is transforming the payments industry, especially within the realm of AI. Zirkle said artificial intelligence has been making significant contributions to security. “We really shape the industry in respect to things like mitigating instances of fraud, gathering critical, vital data to assess what is really going on,” Zirkle said. “Technology makes itself available by the good guys and the bad guys, so the fraudsters have realized what technology means. They’ve elevated their game on fraud, and so as a result, the industry has to be more sophisticated to address these challenges two steps ahead.” Using artificial intelligence allows banks and the rest of the financial services industry to detect suspicious behaviors that could indicate fraud. “If a customer has nine or 10 transactions in New York and then one in Texas, something is going to look suspicious and the capacity of technology to draw us to that suspicious activity is significant and enabled by artificial intelligence,” Zirkle said. Zirkle also said that while artificial intelligence can detect fraud, it can also be used to prevent it with authentication. For example, needing a thumbprint or facial recognition to use your electronic wallet on your smartphone. “At the end of the day, it supports significant activities toward risk mitigation, which is about the creation of a healthy payments ecosystem, one that is viable, one that is sustainable, one that customers come to with trust and confidence,” Zirkle said.

Profile for AZ Big Media

AZBusiness May/June 2019  

In this issue, we spotlight the healthcare leaders and innovators of 2019 and profile the finalists for the Industry Leaders of Arizona Awar...

AZBusiness May/June 2019  

In this issue, we spotlight the healthcare leaders and innovators of 2019 and profile the finalists for the Industry Leaders of Arizona Awar...