With the emergence of financial technology (fintech), companies are expected to offer more financial services to personalize their customer journey, enhance the overall user experience and generate alternative revenue streams.
Provenir, an artificial intelligence-powered decision-making platform, believes that integrating start-up business operations with artificial intelligence (AI) and efficient data management could trigger “a fintech revolution” that will transform industries in the country.
This holds true with the growth of the local fintech market, which has seen a significant valuation increase by 224 percent from $3.4 billion to $11 billion in 2016 to 2021, indicating that Filipinos use at least one fintech service every second.
As mobility restrictions amid the ensuing pandemic constantly result in strong demand for digital services, businesses need to “adapt themselves at a very high speed,” according to Provenir General Manager for Asia-Pacific Bharath Vellore.
“AI in fintech opens the doors for the digitalization of credit-rich verticals and diversifies products and capabilities. Agility and speed in personalization play critical roles in providing personalized offers to customers, aiding in hypergrowth,” he said during a recent forum.
Smart tools like AI can translate big amounts of data into valuable insights such as consumer patterns that help with fraud detection and business risk decisions.
“AI also helps organizations discover new patterns in data that empower them to serve a much wider base of people,” Vellore said, adding that it can also reduce transaction costs, improve data management, and increase employee productivity.
Through AI, patterns can be identified in a vast array of alternative, traditional, linear, and non-linear data. Also, it can enable highly accurate decision-making even for consumers considered “thin-file” or those without files.
This fosters financial inclusion as fintech companies and financial services providers can support the unbanked, which is over 70 percent of the population in Southeast Asia and about 47 percent of adult Filipinos.
“AI can create alternative credit scores for the consumer loan space,” the GM said, saying that it can replace the traditional FICO score used by banks for consumer risk assessments and legacy underwriting, which are slow-moving processes in lending transactions.
Considering the rise of fintech solutions catering to various users, 77 percent of financial institutions have put innovation as their focus to strengthen customer retention. These days, AI is conspicuous 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 by manual analysis alone. It can “advise managers on how to use the information to increase profit.”
“Through AI, an e-wallet is no longer just a channel for paying bills but is now also a bank, and it contains your investment portfolio, insurance, and so much more. A ‘super app’,” said Vellore.
The Philippines has continually transitioned into an AI powerhouse in Southeast Asia as the country leverages on this technology to boost local enterprises’ regional and global cooperation.
At the forefront of this is the Department of Trade and Industry, which launched a national AI roadmap last year, making the Philippines one of the first 50 nations worldwide to do so.