According to a report, banks around the world are expected to spend an additional $31 billion on artificial intelligence (AI) embedded in existing systems by 2025 to reduce fraud.
Similarly for banking executives around the world, managing fraud is strongly touted as a priority, according to the IDC report.
“In the process of creating digital products and services, new channels and payment methods, companies may overestimate the adequacy of their current defenses against fraud,” said Michael Araneta, associate vice president, IDCFinancialInsights.
“What worked well before would simply not suffice now in the more digital business world. There needs to be constant upgrading of fraud management capabilities,” Araneta added.
The banking industry faces two crisis scenarios, each requiring solutions that may run counter to each other.
“Government policy must maneuver, and financial services institutions — banks, insurers, capital market firms — must strike a balance between seeking revenue and managing risk,” Araneta said.
By 2023, the industry will also be into building platforms, which enable financial services to be outsourced and extended to third parties.
“The industry is pursuing new collaborations like banking as a service (BaaS) and digital lifestyle ecosystems. What is very clear is that being digital first means being attuned to the unique moment of the resumption of financial services,” added Araneta.