Article | August 7, 2020
The managing director of AutoRek is speaking from the 8,000 square foot premises in Glasgow’s Garment Factory that the fintech company moved into two years ago to accommodate its continuing growth. A similar move to upgrade its presence in Edinburgh took place at the end of 2019. Forecasts of growth for this year, however, have been ripped up by disruption caused by the coronavirus. But Mr McHarg, who co-founded the business in 1994, remains confident it will still make a profit.
Article | April 9, 2020
As millions of small business owners are applying for low-interest loans associated with the Paycheck Protection Plan, I can’t help but think of all the small business owners I personally spoke with over Facebook last weekend as the PPP got off to a rather bumpy start as lenders tried to absorb the new regulations associated with the SBA’s disaster relief loans. With that in mind, it seemed like a good time to share 4 things that automatically disqualify you for a PPP loan and talk about an option or two for next steps.
Article | April 13, 2021
Over the past decades, banks have been improving their ways of interacting with customers. They have tailored modern technology to the specific character of their work. For example, in the 1960s, the first ATMs appeared, and ten years later, there were already cards for payment. At the beginning of our century, users learned about round-the-clock online banking, and in 2010, they heard about mobile banking. But the development of the financial system didn’t stop there, as the digital age is opening up new opportunities — the use of Artificial Intelligence. By 2023, banks are projected to save $447 billion by applying AI apps. We will tell you how financial institutions are making use of this technology in their operations today.
Chatbots are AI-enabled conversational interfaces. This is one of the most popular cases of applying AI in banking. Bots communicate with thousands of customers on behalf of the bank without requiring large expenses. Researchers have estimated that financial institutions save four minutes for each communication that the chatbot handles.
Since customers use mobile apps to carry out monetary transactions, banks embed chatbot services in them. This makes it possible to attract users’ attention and create a brand that is recognizable in the market.
For example, Bank of America launched a chatbot that sends users notifications, informs them about their balances, makes recommendations for saving money, provides updates to credit reports, and so on. This is the way the bank helps its clients to make informed decisions.
Another example is the launch of the Ceba chatbot, which brought great success to the Australian Commonwealth Bank. With its help, about half a million customers were able to solve more than two hundred banking issues: activate their cards, check account balances, withdraw cash, etc.
AI functionality in mobile apps is becoming more proactive, personalized, and advanced. For example, Royal Bank of Canada has included Siri in its iOS app. Now, to send money to another card, it’s enough to say something like: "Hey, Siri, send $30 to Lisa!" - and confirm the transaction using Touch ID.
Thanks to AI, banks generate 66% more revenue from mobile banking users than when customers visit branches. Banking organizations are paying close attention to this technology to improve their quality of services and remain competitive in the market.
Data collection and analysis
Banking institutions record millions of business transactions every day. The volume of information generated by banks is enormous, so its collection and registration turn into an overwhelming task for employees. Structuring and recording this data is impossible until there is a plan for its use. Therefore, determining the relationship between the collected data is challenging, especially when a bank has thousands of clients.
There used to be the following approach: a client came to a meeting with a bank employee who knew their name and financial history and understood what options were better to offer. But that's history now. With the wealth of data coming from countless transactions, banks are trying to implement innovative business ideas and risk management solutions.
AI-based apps collect and analyze data. This improves the user experience. The information can be used for granting loans or detecting fraud. Companies that estimated their profit from Big Data analysis have reported an average increase in revenue by 8% and a reduction in costs by 10%.
Extension of credit is quite a challenging task for bankers. If a bank gives money to insolvent customers, it can get into difficulties. If a borrower loses a stable income, this leads to default. According to statistics, in 2020, credit card delinquencies in the U.S. rose by 1.4% within six months.
AI-powered systems can appraise customer credit histories more accurately to avoid this level of default. Mobile banking apps track financial transactions and analyze user data. This helps banks anticipate the risks associated with issuing loans, such as customer insolvency or the threat of fraud.
According to the Federal Trade Commission report for 2020, credit card fraud is the most common type of personal data theft.
AI-based systems are effective against malefactors. The programs analyze customer behavior, location, and financial habits and trigger a security mechanism if they detect any unusual activity. ABI Research estimates that spending on AI and cybersecurity analytics will amount to $96 billion by the end of 2021.
Amazon has already acquired harvest.AI - an AI cyber security startup - and launched Macie - a service that applies Machine Learning to detect, sort, and structure data in S3 cloud storage.
Article | March 15, 2020
The financial crisis of 2008 levelled the legacy banking industry quickly and decisively in North America. And rebuilding has been a long process — culturally, operationally and technologically. With the market once again in a state of volatility in part due to the spread of COVID-19, we’re facing the question once again: what does it take for financial institutions to weather the storm?