With the emergence of financial technology (fintech), companies should offer more financial services to personalize the customer journey, improve the overall user experience, and generate alternative revenue streams.
Provenir, an artificial intelligence-based decision-making platform, believes that integrating start-up operations with artificial intelligence (AI) and efficient data management could spark “a fintech revolution” that will transform the country’s industries.
This holds true with the growth of the local fintech market, which saw a significant 224% valuation rise from $ 3.4 billion to $ 11 billion in 2016-2021, indicating Filipinos are using at least one fintech service per second.
As mobility restrictions in the midst of the ensuing pandemic consistently result in strong demand for digital services, businesses must “adapt at a very high speed,” according to Bharath Vellore, Provenir’s Director General for Asia Pacific.
“Artificial intelligence in fintech opens the door to the digitization of credit-rich verticals and diversifies products and capabilities. Agility and speed in personalization play a fundamental role in delivering personalized offers to customers, encouraging hyper-growth, “he said during a recent forum.
Smart tools like artificial intelligence can translate large amounts of data into valuable insights like consumption patterns that help with fraud detection and business risk decisions.
“Artificial intelligence also helps organizations discover new patterns in data that enable them to serve a much larger base of people,” Vellore said, adding that it can also reduce transaction costs, improve data management and increase employee productivity.
Through AI, models can be identified in a wide range of alternative, traditional, linear and non-linear data. In addition, it can enable highly accurate decision making even for consumers who are considered “thin-file” or without files.
This promotes financial inclusion as fintech companies and financial service providers can support the unbanked, who represent over 70% of the population in Southeast Asia and around 47% of adult Filipinos.
“AI can create alternative credit scores for the consumer lending space,” GM said, saying it can replace the traditional FICO score used by banks for consumer risk assessments and inheritance underwriting, which are slow processes in loan transactions.
Considering the rise in fintech solutions that cater to various users, 77% of financial institutions have focused on innovation to strengthen customer loyalty. Nowadays, AI is evident in mobile app features such as “frictionless” customer onboarding via face detection.
But this technology goes beyond the superficial. AI can reveal complex and unexpected variables that cannot be derived from manual analysis alone. It can “advise managers on how to use information to increase profits.”
“Through artificial intelligence, an e-wallet is no longer just a conduit for paying bills, it is now also a bank and contains your portfolio of investments, insurance and much more. A ‘great app’, ”Vellore said.
The Philippines has continually become an artificial intelligence powerhouse in Southeast Asia as the country leverages this technology to strengthen regional and global cooperation of local businesses.
At the forefront is the Department of Commerce and Industry, which last year launched a national roadmap for AI, making the Philippines one of the first 50 nations in the world to do so.