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Fortis 2024 Predictions: Beyond the Hype - 5 Ways AI Will Actually Support Financial Services in 2024

vmblog-predictions-2024 

Industry executives and experts share their predictions for 2024.  Read them in this 16th annual VMblog.com series exclusive.

Beyond the Hype: 5 Ways AI Will Actually Support Financial Services in 2024

By Kevin Shamoun, SVP Product and Innovation at Fortis

If you buy into all the hype, it might seem like artificial intelligence (AI) is taking over the world. Almost everywhere you turn there's a new, jaw-dropping application, from AI-powered surgery and bee drones for pollinating crops to crafting incredibly realistic deep fake video.

While it's true that the applications of AI are broad and ever evolving, the reality is, for business applications, a lot of companies are playing it safe; there's an incredible amount of risk involved, especially in high-stakes industries like financial services. But despite the conservative approach to AI when it comes to money, there are some very exciting applications on the horizon, and I believe 2024 will be a year of massive progress. Based on my experience in the payments industry, as well as my role as vice chair of the Electronic Transactions Association's AI Committee, here's where we'll see the biggest AI impact for financial services in the coming year.

  • Streamlined service. Due to inconvenience, anxiety or both, a growing number of people-including 90% of Gen Z-hate talking on the phone. They'd much rather text or use a chatbot, especially when it comes to customer service tasks. That creates a huge opportunity for AI-powered customer service tools to provide self-service with automated responses to help answer questions, resolve account issues and handle routine transactions. In the coming year, we can expect AI-driven service platforms to become increasingly realistic and sophisticated, to the point that the user may not even know it's an AI bot. And as long as it gives them the answer or resolution they seek, they likely won't care.
  • Improved productivity. There are a lot of fears in every industry that AI will put people out of work. While it may eliminate some of the mundane, manual and repetitive tasks that humans currently handle, it won't eliminate the talent-it will simply free up those resources for more engaging, productive activities. By automating the mundane tasks with AI, companies can re-direct those human resources to more creative and innovative endeavors that require more strategic thinking, enhancing productivity and capacity for growth.
  • Powering the battle between good and evil. Increasingly bad actors are using AI to discover and exploit new fraud vectors and cyberattack vulnerabilities, including training machines to conduct multiple simultaneous penetration attempts. Unfortunately, just like AI exponentially expands the capacity of financial service providers to get more done with less human effort, it works the same way for hackers. Fortunately, the good guys are using it too to stay on top of emerging threats. AI can be leveraged to track patterns in spending and purchase behavior, allowing the ability to spot anomalies in real-time.
  • Better personalization. One of the huge advantages AI has over humans is its ability to analyze data and mine for actionable insights at a speed no human could ever achieve. For financial service companies, this is a gateway to offering customers a more personalized experience. By diving into user data to understand patterns, behaviors and history, AI can predict future needs and help companies provide customized interactions and highly relevant experiences. In an era in which "just for me" service is the baseline expectation, this use of AI will help financial service providers differentiate from the competition with more efficient and cost-effective personalized service.
  • More regulation. Because of the security concerns and potential for risk in AI, it's no surprise governance is a major concern and regulators are already eager to step in. President Biden has already issued an executive order, but this mostly provides guidance, rather than a mandate. The European Union is much further ahead, but even so, this slow momentum underscores one of the most difficult aspects of regulating any emerging technology: The tech is advancing much faster than the laws can keep pace. This means the onus is on government regulators to develop frameworks that are flexible enough to stay current and avoid stifling innovation. While it may be hard for anything concrete to pass in 2024 as an election year, we'll likely start to see regulators thinking more about AI policy.

There's no doubt that AI has potential to transform the way we do business, even in the traditionally cautious and slow-to-adopt financial services sector. But rather than a massive push from groundbreaking solutions, expect to see a more measured adoption, which gives both businesses and consumers an opportunity to build trust, comfort and confidence in the solutions.

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ABOUT THE AUTHOR

Kevin Shamoun 

Kevin Shamoun is the SVP of Product and Innovation for Fortis. He brings extensive operational and technical knowledge of the payment industry including almost 20 years' experience working with major Independent Service Organizations (ISOs) and financial institutions. Kevin is the founder of Zeamster, a payment gateway company that was acquired by Fortis in 2019. He is currently the Chair of the Technology Committee for the Electronic Transaction Association (ETA). 

Published Wednesday, November 22, 2023 7:40 AM by David Marshall
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