ARTIFICIAL

INTELLIGEN
CE IN
FINANCIAL
SECTO
R

Shantanu Krishna
 CONTENT & FLOW OF PRESENTATION

UAE
Overview- Changing AI Are you AI
Market Exchange-
Remittanc Landscape Areas of application Ready?
e Industry Operations s
Overview- Remittance
Industry
 • For the first time in recent history, remittance flows to developing
REMITTAN countries registered a decline for two successive years.

CE • Remittances declined by an estimated 2.4 percent, to $429 billion, in

INDUSTRY 2016, after a decline of 1 percent in 2015.

• Low Oil prices & weak economic growth in Russia & GCC countries –
main
reasons of lower remittance flow.

Going
through a
Transitionar
y Phase…
Remittance flow to
developing
countries on a
 • Structural constraints like De-Risking* raising regulatory burdens on
money transfer operators
REMITTAN
CE • Labor market “Nationalization” policies in the GCC & Anti
INDUSTRY immigration sentiments have dampened remittance flows, especially
through formal channels.

• Imposition of Service Tax of 12.36% by Govt. of India, on remitting

money is passed on directly to consumers making it difficult for the
businesses to maintain competitiveness.
Going
• Despite this,
through a UAE has the
Transitionar lowest
remittance fee of
y Phase… 2.5%

Increased Cost of
remittances adding
to the problem
*International correspondent banks close the bank accounts of money transfer operators, to avoid the risks of money laundering and financial crime
 Changing Market Landscape

Rising remittance costs coupled with rapid technological

innovation has made the market more competitive than ever!

Let’s understand this changing Market Landscape!

 1. Emerging Social Media Platforms for Money Transfer
Services

CHANGING Facebook has currently around 50 different

MARKET regulatory licences in the US alone that will allow
LANDSCAPE FB users to
transfer money via their messenger app.

It has become one of the most common tools to transfer

Disruptive Innovations money. Last Chinese New Year, they processed more
in Financial Services than 8 billion red envelope transactions

Social Media
encircling Alibaba’s firm launched a money market fund that has
Money Transfer become the 3rd biggest money market fund in the
world, dislodging incumbents who have been doing
services! this for decades.

*Source: World Bank, April 2017

 2. Digital becoming mainstream

• Using the existing card infrastructure, creation of new cards

CHANGING based products ( dual cards) through which migrants families
MARKET can withdraw remittances through ATMs
LANDSCAPE
• Proliferation of smartphones that make online transfers more
convenient & cheaper

3. Future Financial platforms will not be traditional banks but will be

technological firms
Disruptive Innovations
• Peer to peer lending platforms now offer consumers an
in Financial Services
alternative to loans that used to be previously available mainly
at banks
P2P Lending
platforms & • Robo advisory platforms offer consumers asset management
Digital media solutions that are not only more transparent than what they
charge but also substantially cheaper.
growth
*Source: World Bank, April 2017
 4. FIN-TECH (Financial Technology) in key sectors

It is the innovative use of technology in the design & delivery

CHANGING of financial services to replace the old or enhance the usage of
MARKET these services in the existing financial companies.
LANDSCAPE

Disruptive Innovations
in Financial Services
Rise of

Fintec
h
*Source: PWC global Fintech Survey, 2016
 Fintech is an umbrella that covers a number of categories of
IT innovations applied in the financial sector, such as:

CHANGING
MARKET
LANDSCAPE Big
Algorith
m based
Stock Trading
Financia Dat
a Tradin
l
g
Educatio Peer to
Disruptive Innovations n
Crypto Apps
in Financial Services Peer
Robo Currenc Artificial Lending
Rise of Advisor y
s Intelligenc Persona
Bloc
e l
k
Fintec Chai Crowd
Financ
e Tools
h n
Fundin
g
 Focus on
Artificial
Intelligence
 AI is a field in computer science that focuses on simulating the
intelligence of humans into artificial machines with the help of
Artificial sophisticated machine learning and natural language processing
Intelligenc algorithms.
MAJOR BRANCHES OF AI- REPLICATING ABILITY TO THINK, ACT & LEARN
e

“Machine intelligence is the last

invention that humanity will ever
need to make”

Nick Bostrom

*Source: AI Magazine, Vol. 27, Number 3

 AI is a field in computer science that focuses on simulating the
intelligence of humans into artificial machines with the help of
Artificial sophisticated machine learning and natural language processing
Intelligenc algorithms.
MAJOR BRANCHES OF AI
e
1. Machine Learning: Machine learning is the
process of automatically discovering patterns in
data. Once discovered, the pattern can be used
to make predictions. Important algorithms:
1. Regression Based Algorithms
2. ANN ( Artificial Neural Networks)
3. Fuzzy Logics
4. KNN
5. Bayesian Networks

“Machine intelligence is the last

invention that humanity will ever
2. Autonomics: Refers to the systems
need to make”
that are designed to
operations perform
performed by humans.
routineTheytasks and
Nick Bostrom are
programs that ‘observe’ the way a trained user
takes decisions or resolve issues and replicate
the same decision making process in future
events.
 AI is a field in computer science that focuses on simulating the
intelligence of humans into artificial machines with the help of
Artificial sophisticated machine learning and natural language processing
Intelligenc algorithms.
MAJOR BRANCHES OF AI
e
3. Machine vision: Refers ability
to the computers of
to identifyin objects,
activities images. Computer scenesvision
technology uses sequences of imageandprocessing
operations that breaks down images to
manageable pieces.
E.g. Face recognition softwares used by FB.

“Machine intelligence is the last

invention that humanity will ever
need to make”
4. NLP: Ability of a computer to interpret human
Nick Bostrom language and take appropriate action. Most well
known application is Siri for the iPhone.
AI
Application
 Avoid AML* Practices by having a more efficient KYC System
This is done to avoid false positives & false negatives by using AI & ML Algorithms

Learning: Reasoning: Self-correction:

learning from data on
the ability to draw Improving future
which a model
conclusions outcomes based on
is
feedback to past
developed & rules are
reasoning
created

Important AI/ML Techniques

Artificial
• Machine Learning: Machine learning provides computers the
Intelligenc ability to
learn and change without being explicitly programmed.
e • Collaborative Filtering: Capable of finding transactions with
missing, matching and/or odd information.
Applicatio • Feature Matching: Utilized to identify transactions below a
n in specific monetary threshold
Money • Fuzzy Logic: Used to find data matches with slight changes to
Transfer names or addresses

Services
*AML stands for Anti Money Laundering Practices
 Avoid AML* Practices by having a more efficient KYC
System
Essential features of AI Solutions & Potential Applications in KYC-
AML

Artificial
Intelligenc
e

Applicatio
n in
Money
Transfer
Services
*AML stands for Anti Money Laundering Practices Source: Celent
 Check the rising cost of Customer Servicing through Chat-
Bots!
Bots are simple artificial intelligence systems that you interact with via text.

“Chatbots also have the potential to help businesses significantly cut labor
costs. While complete automation of the customer service workforce is not
feasible, automating customer management and sales positions where possible
through Chatbots and other automation technologies would result in
considerable
savings.” (The Chatbot Explainer, BI Intelligence, July 2016)

Artificial
Intelligenc
e

Applicatio
n in
Money
This could help in better utilization of funds & resources & reduction in
Transfer the cost it takes to hire & train new agents in situations of high
Services attrition!
 Predicting Foreign Exchange prices for better money
management
This could be important to minimize risks/ adjust costings to maximize returns

Artificial
Intelligenc
e
Using NLP & Text Mining/Sentiment Analysis techniques, Currency
Market Predictions are possible by analyzing written text sentiments of
Application people on Twitter & other social platforms.
in Foreign
This could be important to make important business decisions
Exchange Services including anticipating money transfer requests & manpower
requirement/ Cost estimation &
 Robo Advisors to give wealth management tips to your
clients!
Personalized port-folio decisions taking into account client’s historical
investment decisions, Market reports, Risk profile & other factors

What & How do they do?

Scouring ❶ ❷ Profiling info. to

articles, stock figure out the best
ratings, reports Scourin investment
Artificial by AI Bots to g Big Knowin
collect data data g decisions
Intelligenc from what to
different
e sources
invest
in?

Applicatio Market
Preparing
for
Predictions
n in investmen AI chatbots
Market t
Wealth predictions
Can help client
answer all possible
Manageme considering all
possible factors
questions before
investment
❹ ❸
nt Services
 AI Bots built with NLP & ML algorithms are making it easy to
make bill payments with/without internet

This allows users to make direct p2p payments without leaving

your preferred app or platform. For instance, you can simply
type “/PayPal send $5 to @Tom” within Slack to pay him back
for that morning cup of coffee.

Artificial
Companies like Hipmunk are using Messenger to book and pay
Intelligenc for hotels with the linked card on Facebook directly within
e Messenger, which streamlines their entire booking process.

Application
in Utility Mypoolin offers chatbot that allows you to send or receive
payments via text messaging. All users have to do is input a
Bill command like ‘transfer [amount] [phone number]’ and once
Payments the payment is processed the recipient receives the money
instantly.
 Why superior Customer Experience is so important?

Rising awareness Greater Consumer Eroding

in Choice Loyalt
substitutes y
available
Customer Experience

Artificial
Stream Personalizatio Image & Robotic
Intelligenc Lining n of Pattern Process
Processes Marketing recognition Automation
e Natural NLP for Real Time
Marketing
Languag Customer Tailored
Automation
Application e Satisfactio Communication
Interface n
for s
Recommenda-
Predicting Improve
Customer Churn Customer
superior tion Systems
& Loyalty &
CX Segmentation Retention
How is AI changing Customer
*CX stands for Customer Experience Experience?
 Stream Contact centers improve customer interactions by using
Lining Chatbots to provide quick resolutions to their problems,
Processes there by reducing over head costs without impacting
customer service

Businesses are increasingly taking advantage of this desire for

personalization by employing AI to analyze their customers’
Personalization
habits and interests and offering them sales, marketing and
other content that entices them to make a purchase

Robotic RPA is the application of a computer software or

Artificial Process “robot” to process transactions, manipulate data or
trigger responses, depending on the scope of the
Intelligenc Automation
request.
e Leveraging algorithms like Naïve Bayes & Neural Networks, Recommendation
we can analyze history of product purchases (Financial) and Systems
Application present personalized content recommendations.

for Natural Language Speech recognition technology has come a long way
superior Interfaces with advances in natural language understanding. This
enables customers to speak to an Interactive Voice
CX Response (IVR) system in a natural way.

Few Examples
*CX stands for Customer Experience
 Implement the following before thinking about AI

Integrated Identify Starting

Focus on Clean Point
data
data:
warehousing: Think about deploying
ML algorithms require AI strategically
Connect data from
clean data to learn from
different silos

4 Different ways to deploy AI in your Organization!

Artificial Automated Assisted
Intelligenc
Augmente
d
Autonomous

Intelligenc Intelligenc
e
e Intelligenc
e
intelligence
• Improves • Helps people • Helps people • Automates
e human perform tasks make better decision-
productivity by faster and decisions by making
automating better (e.g., analyzing past processes
Is Your Organization manual tasks
(e.g., software
medical image
classification,
behavior (e.g.,
media
without human
intervention
ready for AI? that compares
documents and
real-time
operational
curation,
guided
while also
putting
spots efficiency personal controls into
inconsistencies improvement). budgeting, on- place
and errors). the-fly
decision
analysis).
Thank You!