Too Open to AI? GFT Advises Caution Against Banking Fraud

Banks are considering AI more in order to maintain customer trust
GFT’s Banking Disruption Index reveals customers are open to AI in banking for fraud detection, but transparency is key to protect against cyber threats

Banking customers across the United States (US) are opening up to the idea of artificial intelligence (AI) in the financial sector - but only under certain conditions.

According to GFT’s Banking Disruption Index, 44% of US consumers are currently happy with AI being used within their personal banking experience. However, this is only as long as banks continue to allow them visibility into how the technology is being used. 

AI can hold benefits within everyday banking, including helping to protect customers from cybersecurity threats. Currently, whilst fintechs and neobanks continue to release a range of AI innovations for consumers, banks have arguably been slower to adopt the technology.

GFT suggests that banks still have the power to strategically implement AI if they can pinpoint the most high-value use cases. 

Interest into practical applications of AI rises

At the start of 2024, it was found that the majority of banking customers were still uncomfortable over AI being used within the sector. Notably, this was due to the growing use of AI being present in fraudulent activity.

However, there is an opportunity for financial institutions to harness AI as a responsible tool to significantly reduce financial crime.

“Whether they use AI to identify fraud patterns, analyse networks or streamline processes, banks can take the lead on what we believe will be a key trend in 2024: explainability, namely the ability to demonstrate to their customers how and why AI models have taken decisions that affect them,” Vatsa Narasimha, CEO at ComplyAdvantage previously explained to FinTech Magazine.

The GFT report found that customers are not yet ready for AI to expand too far beyond simple day-to-day banking capabilities. It suggests that traditional banks should focus on enhancing existing AI solutions based on consumer priorities, in order to retain their trust and satisfaction.

When asked what features they were most open to using in their day to day banking, the majority of Americans surveyed in the report chose real-time fraud monitoring (35%). When used in fraud monitoring, AI presents an opportunity for banks and customers alike to better protect money, accounts and personal information - which is particularly vital, given the 2023 surge in fraudulent transactions impacting the industry. 

Another priority for customers was cited as saving money, with 90% of US citizens looking for new ways to save. Within the background of the current cost of living crisis, GFT found that nearly one-third of respondents are eager for AI to help them budget and reduce daily costs.

Likewise, 28% of respondents state they would like checking balances, transferring funds and receiving account updates as tasks they would like automated.

Moving towards a more AI-led mindset

Banks are ultimately considering AI more in order to maintain customer trust, according to GFT’s CEO Americas, Marco Santos.

“Retaining consumers’ business is no longer just a matter of digital transformation for banks, it’s one of AI implementation,” he comments. “While it may seem that digitally native competitors would have a leg up in the AI-race, consumers’ banking wishlist of fraud detection, banking advice, and other day to day tasks are all capabilities that traditional banks are more than capable of enhancing with AI.”

He adds: “Bringing these optimised experiences to consumers, combined with legacy institutions' long established security regulations, empowers traditional banks to not only maintain market share but also establish a strong initial foundation with consumers. This will allow them to scale securely moving forward.”

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