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The Role of AI in Banking and Financial Compliance

Maintaining your compliance is a crucial element of running a banking or financial business. Not only is it important to ensure you’re in line with government requirements, but it also increases the security of your customers and enhances the day-to-day operations of your business.

At FWF, we provide AI and digital automation services that improve the efficiency of financial institutions while ensuring they remain compliant. In this article, we’ll discuss how AI is used in banking and finance, how it could be used, and the benefits of an early adoption of AI tools.

Optimise your banking and financial processes with AI solutions from FWF – contact us to get started.

How is AI Used in the Banking and Finance Sectors?

AI is already gaining significant traction within the banking and finance sectors. The current role of AI in banking and finance is to:

  • Help identify fraud
  • Respond to customer queries via chatbots
  • Assist with creating data models for customers with limited credit history

However, the potential of AI is far beyond its current applications. Many still believe that AI isn’t yet ready for implementation, but leading AI solutions are already being used by hundreds of businesses worldwide.

AI has enormous potential in supporting many aspects of banking and finance and is of key importance in ensuring your financial services remain compliant and stable.

The Impact of AI on Banking Compliance

Moving towards the future is imperative in ensuring the security of customer finances and complete control of your regulatory compliance. The UK government performs regular audits on banking compliance and follows a strict code of practice to ensure compliance is understood and upheld.

With banking and finance, modernising your systems to include AI assistance can dramatically improve your results. Adopting AI allows you to automate the process of compliance. Rather than having a human be in control, this will streamline your administration and financial services while also offering a greater consistency in your results.

A trained employee is still an important part of the process. Not only do these systems have to be maintained, but it is also important to have knowledge individuals oversee the automation of financial services – creating a sense of responsibility, and a stopgap for error.

AI is best implemented as part of a wider-reaching enhancement to your services, offering improvements to efficiency, systems management, and compliancy across the board.

Explore our digital & AI services for the banking sector >

The Effect of AI on Compliance Organisations

With billions of users resulting in trillions of individual transactions worldwide, the banking and financial sectors are a place where speed and efficiency are of key importance. Within that, regulatory compliance is a must to ensure the function of a global economy and the security of individuals’ finances.

Compliancy organisations have traditionally run on manual operations, and many deep-rooted practices involving human elements that some have been hesitant to progress from.

The role of AI in banking and finance means that compliancy at its core can be more easily automated, resulting in a decreased need for human interaction at the initial stages of compliancy.

Banking and Finance AI software

AI Fraud Detection for Banking and Finance

AI as a tool for fraud detection has already been adopted by banks and financial institutes – just not in the form it has evolved to today. The in-use technique is called “anomaly detection”, a process which enables the automation of cybersecurity features like anti-fraud and anti-money laundering.

Now, more than a decade later, further advancements in AI have created the opportunity for even greater involvement of AI when it comes to fraud detection – leading to easier compliance for banking and finance, and more security for customers.

Machine learning is a key component of a functioning AI system. It can be of great benefit to banks, analysing data across multiple channels to detect occurrences of fraud across a range of transactions and applications.

The data from this analysis can be automated using intelligent automation solutions, but it also has the capacity to be forwarded to a human element like a support team to make an informed decision.

Fraud Prevention and the Role of AI

As well as detecting possible instances of fraud, AI is also an incredible asset for preventing fraud from occurring in the first place. Similar process functioning off lower-level services are in use, but revolutionising these with a full adoption of AI into your financial business model can further increase your cybersecurity and prevent fraud.

The main way in which these developing AI technologies can impact your fraud prevention is through a further application of the “deep learning” principle, which trains a neural network to recognise behavioural patterns – potentially preventing fraud by warning customers or restricting unexpected inputs automatically.

Get in touch with us today and discover ways to drive your business towards the future.

The Benefits of Using AI for Banking and Finance

While compliance is a major aspect of the advantages of adopting AI into you banking or financial business, there are other benefits that AI offers which can help propel every digital process you use.

Our top five benefits of using AI for banking and finance are:

  1. Cost reductions
  2. Greater operational efficiency
  3. Reduced risk factors
  4. Automated decision making
  5. A broader scope of data

Cost Reductions

By reducing the labour required for repetitive, heavily involved processes, you’ll be able to cut down on the costs of your operations. Plus, this is a great way to mitigate the risks and costs that come with human error.

Greater Operational Efficiency

A greater collaboration of digital elements, a more holistic view of your organisation’s data, and faster processing of these factors all combines to result in greater operational efficiency.

Reduced Risk Factors

Analysing trends and behavioural patterns with a full implementation of AI can result in risk mitigation when it comes to lending, credit, and financial investments.

Automated Decision Making

While a human is important for signing off on important final decisions, the minor processes along the way can be automated for far greater efficiency. This allows you to streamline your decision-making process and focus only on what matters.

A Broader Scope of Data

By having access to a greater quantity of data, along with an enhanced method of sifting through and analysing this information, you’ll be able to have more comprehensive control over your compliancy and business practices.

See our automation service’s potential in our blog on the combined forced of FWF and FastPath >

Banking and Financial Compliance with AI from FWF

By incorporating AI and intelligent technologies into your banking or financial business, you can streamline your day-to-day services while producing improvements to compliancy, efficiency, and security for your business and your clients.

At FWF we harness the power of digital technologies, automation, and AI to supply cutting-edge technology solutions to banks and other members of the financial industry. Give your financial business a boost with the power of AI – see our services to find out how we do it, get in touch via our website, or give us a call on +44 (0) 20 8124 5084.

Meet the Authors

Dan Johnson

Dan Johnson

Director of Automation

Director and Co-founder at FWF UK. Dan has committed his career to the technology industry and has over a decade of experience working at senior strategic levels in Financial Services, including Insurance Process Automation Lead at Accenture UK&I and Head of Automation at Close Brothers Bank.

Contact Dan
Daniel Young

Daniel Young

Consulting Director

Has over 20 years of consulting experience at global system integrators across Europe, US, Middle East and Asia. Prior to FWF, Daniel led Intelligent Automation Consulting Practices supporting organisations across Financial Services, Banking, Insurance, and Energy sectors to achieve value from Intelligent Automation.

Contact Daniel