Industry
Banking
Banking Services Transformation: Unlocking Exponential Value
Highlights
- Emerging technologies and evolving customer demand for faster payment processing have accelerated the shift towards automated solutions- driving improvements in STP, strengthening regulatory compliance and enhancing data security
- By integrating GenAI into an existing business environment, banks can unlock advantages including improved customer experience, faster turn-around time and data-driven decision-making
- With growing competition around faster payments, banks face increasing pressure to not only accelerate transactions but also ensure strict compliance with regulatory requirements, particularly in areas like anti-money laundering (AML) detection and controls
On this page
The GenAI potential
Amplifying accuracy, compliance, consistency and personalization
GenAI driven automation helps overcome limitations of STP failures and integration challenges by reducing manual touchpoints. This leads to faster turnaround times, while built-in controls such as validations for duplicate payments and data entry errors ensure accuracy and compliance.
The surge in digital payments is driving banks to modernize their platforms and transform operations- not just to handle higher volumes efficiently, but to deliver a seamless and consisttent customer experience.
With vast amounts of data now available, banks can leverage AI to enable predictive analytics, real-time payment tracking and proactive customer insights to a more personalized and enhanced customer experience.
Challenges
Modernization can tackle the barriers to seamless payment operations
STP failure leading to manual processing - While banks have been working towards improving STP for payments processing, there are failures to STP due to missing information, potential duplicate payments, compliance hits, validation failures.
Human decision making for fraud, money laundering – Decision on fraudulent transactions or money laundering is taken by the processing agent basis predefined triggers along with their intelligence.
Reactive analytics and insight – Information is typically provided to customers only in response to their queries or needs, which results in a reactive and less engaging experience. This is done usually for tracking payments, exceptions, fees, advisory services.
Cost pressure and losing competitive edge – Time consuming processing drives up operational costs, directly affecting bank’s financial performance and increasing risk of losing business to competitors that offer faster time-to-market.
Regulatory / data breaches – Non-compliance to regulatory requirements or data breaches invoke penalties for the bank and also cause a dent to the brand image.
Solutions
GenAI as a catalyst for evolution
- Smart processing (missing data, duplicate checks) - GenAI can understand the STP failures and auto-fix the breakage by getting the required information for re-STP. Information can be gathered, and content can be created for re-STP through:
- Learning from past processing (machine learning)
- Business rules validation adding artificial intelligence (rulesets capturing human decision making)
- Validations of duplicate payments using AI
- Extract and compare special instructions vs data-entry performed to eliminate mismatch errors
- Fraud detection: Analyzing payment patterns, GenAI can identify anomalies that may indicate fraudulent activity, money laundering and alerts can be auto created. (Checks such as price variations, comparison to line of business vs goods/services involved in the transaction can be introduced)
- Premium advisory services to customers on a real-time basis by referring to various regulatory requirements and compliance to those using GenAI (regulations such as Doddfrank, LIBOR, ISO 20022, etc. and bank product programs)
- Intelligent chatbot using GenAI can generate responses to customer inquiries regarding payments, provide real-time payment tracking, and offer solutions to queries thereby improving the overall customer experience
- Predictive analytics - By generating predictive models, AI can forecast cash-flow scenarios, helping businesses to manage their capital. AI can also help with business trends of the clients to proactively engage and grow the wallet for the bank
- KYC: adverse media checks – Check on the background of the parties involved in the transaction beyond sanctions to help bank make more informed lending and credit decisions calls, thereby reducing risks
Benefits
Revolutionize payments operations for an enriched customer experience and stronger controls
- Customer experience: Proactive insights, predictive analytics, faster turnaround would create customer delight and a journey which helps repetitive and long-term business.
- Faster turnaround: Automated processing using AI, GenAI will lead to improvements in STP and the opportunity to re-STP transactions eliminating manual interventions. Automation also help scalability by managing volume fluctuations.
- Human independent process: GenAI helps augment human decision-making, with humans providing intelligent insights and contextual knowledge to automate informed decision making.
- Risk reduction: Automated fraud detections, and identification of money laundering transactions will help reduce risk for the bank and avoid penalties if any.
- Regulatory compliance: Adherence to regulatory requirements through automated reporting on time and with accuracy.
- Opening business avenues: Predictive AI helps bank proactively connect with customers for business opportunities and also cross-sell the services based on trends of the customer transaction lifecycle.
Way Forward
Going beyond incremental automation for intelligent, scalable operations
Adopting GenAI empowers financial institutions to go beyond incremental automation enabling intelligent, scalable operations that keep pace with real-time demands and evolving compliance standards. By integrating GenAI into an existing business environment, banks can unlock advantages including improved customer experience, faster turn-around time and data-driven decision-making. Now is the time to evaluate how GenAI can be embedded into your payment ecosystem starting with high-impact, low-risk use cases that deliver measurable ROI.
