In the highly competitive banking industry, banks and financial institutions (FIs) strive to provide greater financial products and services to remain competitive and increase customer retention and loyalty. In order to achieve this, most of the banks and FIs have started to transform digitally as they recognise the imperative to adapt to technological advancements. However, recent EY research on bank transformation reveals various failure factors, including insufficient commitment to customer centricity. Customer centricity is not just a buzzword; it is a strategic approach that shapes the way banks and FIs interact with their customers. But what exactly does it mean, and why is it crucial for the industry? Let’s delve into the heart of customer centricity and explore its impact on modern banking.

Understanding Customer Centricity in Banking

Customer centricity in the banking context refers to a strategy where banks and FIs prioritise the needs, preferences, and experiences of their customers above all else. Instead of forcing customers to adapt to what the bank offers, the idea is to build financial products, services, and experiences around what customers really want. Historically, banks and FIs have been product-centric, focusing on designing and pushing financial products without necessarily considering the unique needs and preferences of their customers. However, as technology advances and competition intensifies, it is crucial for banks and FIs to shift towards a more customer-centric model, where the customer experience takes centre stage. 

With that being said, customer centricity revolves around comprehending and fulfilling the requirements and anticipations of customers. This entails going beyond merely delivering financial products or services, instead, it involves actively listening to customer feedback, analysing their behaviour, and adapting offerings to suit their preferences. By prioritising customer needs, banks and FIs can tailor their strategies, products, and services to create meaningful and personalised experiences that foster loyalty and satisfaction. Embracing customer centricity not only enhances customer relationships but also drives innovation and long-term business success. This spontaneously raises the most crucial question: How to achieve customer centricity in banking?

How to Achieve Customer Centricity in Banking?

Hyper-personalisation

Hyper-personalised banking experiences are a critical component of achieving customer centricity in the banking industry. Deloitte’s analysis emphasises that in a digital economy, hyper-personalisation is not merely an option but a crucial imperative. By leveraging advanced data analytics, artificial intelligence (AI), and machine learning (ML), banks and FIs can provide hyper-personalised customer experiences that cater to their unique financial situations and preferences. In particular, this approach requires the utilisation and integration of predictive analytics and recommendation engines to deliver personalised recommendations in real-time. With JurisTech’s digital customer onboarding platform, banks and FIs can impress their customers with tailored financial content and product suggestions perfectly aligned with their profiles during the onboarding journey. 

Furthermore, banks and FIs can also deliver hyper-personalised customer experiences through the integration of AI-driven chatbots. Customers often have specific questions or needs when it comes to banking services, but traditional support channels may be limited after business hours. AI-driven chatbots, on the other hand, are 24/7 and can provide tailored assistance in real-time, answering queries, providing account information, assisting with transactions, and guiding customers through financial processes. This underscores the importance for banks and FIs to adopt AI-driven technologies to provide hyper-personalised customer experiences, reflecting their customer-centric approach. Other than that, leveraging technology like Generative Al (Gen AI), banks and FIs can adopt a hyper-personalised content assistant to deliver highly customised and tailored content and services to banking customers. Particularly, the hyper-personalised content assistant can generate a myriad of personalised financial literacy content that can benefit their customers, potentially increasing the likelihood of customers purchasing the offered financial products. 

Omnichannel Experience

Omnichannel experience is paramount for banks and FIs aiming to achieve customer centricity. The omnichannel experience focuses on providing a cohesive and consistent customer journey across all touchpoints, whether it is through mobile banking apps, online platforms, or traditional brick-and-mortar branches. With that being said, digital transformation plays a significant role in creating an omnichannel experience. By integrating digital technologies into all aspects of the banking process, banks and FIs can provide a seamless and consistent experience across various channels. This integration enables customers to transition smoothly between channels, ensuring that their journey with the bank or financial institution (FI) is efficient, frictionless, and enjoyable. 

Additionally, to create a more wholesome omnichannel experience, more is needed than just looking at the front-end technologies. An intuitive and user-friendly backend portal is crucial for your users to access to increase your business workflow flexibility. For instance, being able to edit forms on the fly, having a no-code backend system for non-technical users, having highly configurable fields to meet your unique business process, or having powerful visual dashboards and analytics to aid your decision-making process. Specifically, banks and FIs can strategically implement JurisTech’s digital customer onboarding platform that enables customers to apply for loans and financing products at their convenience, regardless of time or location.

Customer Feedback and Communication

Customer feedback is invaluable for achieving customer centricity. By actively soliciting and analysing customer feedback, banks and FIs can identify areas for improvement, address pain points, and enhance the overall customer experience. Effective communication strategies between banks and FIs and customers are also crucial for building trust, fostering transparency, and ensuring timely and accurate information exchange. 

For example, the implementation of  a Gen AI-powered dynamic FAQ generation systemGenAI can assist banks and FIs to dynamically generate, analyse and update FAQs for banking services and products. This allows the banks and FIs to analyse customer inquiries, feedback, and interaction data in real-time. Moreover, by leveraging machine learning algorithms and natural language processing techniques, these technologies are able to further identify common customer queries, trends, and preferences, and automatically generate and update FAQs accordingly.

​Another classic example would be the utilisation of AI-driven chatbots for banks and FIs to listen attentively to customer concerns and provide them the ability to respond promptly. By establishing open channels of communication, banks and FIs are able to demonstrate their commitment to understanding and meeting the needs of their customers. This proactive approach not only fosters customer loyalty and satisfaction but also positions the banks and FIs for long-term success in a competitive market landscape.

Key Challenges in Achieving Customer Centricity in Banking

Inefficient and Manual Workflows

Inefficient and manual workflows pose a significant challenge for banks and FIs striving to achieve customer centricity. These outdated processes often rely heavily on manual data entry, paper-based documentation, and disjointed systems. As a result, customer interactions can be marred by delays, errors, and inconsistencies, leading to frustration and dissatisfaction among customers. Moreover, such workflows hinder agility and responsiveness, making it difficult for banks and FIs to adapt quickly to evolving customer needs. Consequently, banks and FIs that continue adopting inefficient and manual workflows will find it increasingly challenging to achieve customer centricity over time.

Cultural Resistance

But what keeps banks and FIs stuck in the aforementioned challenge? Cultural resistance represents another formidable obstacle to achieving customer centricity in banking. Understandably, many banks and FIs may encounter internal resistance to change, especially in traditional organisations with deeply ingrained processes. This resistance often stems from fear of the unknown, reluctance to deviate from familiar practices, and concerns about disruption or loss of control. However, failure to adapt to evolving customer expectations and industry trends may result in a loss of competitive edge and market share. As competitors embrace transformation and adopt customer-centric strategies, banks and FIs that resist change risk falling behind and missing out on opportunities for growth and success.

Technological Limitations

On the other hand, technological limitations can also be one of the key challenges that hinder banks and FIs in achieving customer centricity. Integration issues and data silos hinder their ability to implement customer-centric strategies effectively. Integration problems arise when systems within a bank’s and FI’s infrastructure struggle to communicate due to the adoption of outdated technology. Many banks and FIs operate on outdated systems that lack flexibility and scalability, leading to siloed data and disjointed customer experiences. This fragmentation inhibits banks from gaining a holistic view of their customers and providing seamless services across channels. Therefore, this will ultimately hinder their ability to personalise interactions and tailor offerings to individual customer needs.

Best Practices to Overcome These Challenges

Automated and Streamlined Workflow

To overcome the initial challenge, banks and FIs must prioritise digitalisation efforts by incorporating advanced technologies into their operations. By prioritising digitalisation, banks and FIs can effectively automate and streamline their workflow. For instance, JurisTech’s digital customer onboarding platform, robust loan origination system, and debt collection system can effectively assist banks and FIs to automate and streamline their end-to-end lending processes. Through the implementation of the solutions, banks and FIs can seamlessly automate their complex lending processes, reduce manual intervention, and notably enhance operational efficiency. This shift towards automation not only improves the speed and accuracy of customer interactions but also frees up valuable resources to focus on delivering exceptional service. As a result, banks and FIs can achieve customer centricity and enhance their profitability. 

Cultural Transformation Initiatives

Frank Elderson, Member of the Executive Board of the European Central Bank (ECB) and Vice-Chair of the Supervisory Board of the ECB, asserted that culture can deeply influence the behaviour within a bank or FI, ultimately determining their destiny. Thus, banks and FIs must embark on cultural transformation initiatives that foster a customer-centric mindset among employees. This involves investing in comprehensive training programs that emphasise the importance of customer focus, open communication channels that encourage feedback and collaboration, and leadership support that champions customer-centric values. According to Forrester’s State of Customer Obsession Survey 2023, 100% of customer-centric companies prioritise educating their employees on their roles. This means that it is essential for banks and FIs to provide internal training programs that can foster a company culture where customer centricity thrives.

Technological Advancement

To address integration issues and data silos that due to outdated technologies, banks and FIs must embrace technological advancements that enable seamless integration and data accessibility. For example, JurisTech’s digital customer onboarding platform, equipped with Web API integration capabilities, is able to facilitate the swift integration of a wide range of core banking systems and third-party systems such as leading credit bureaus in Malaysia like Credit Tip Off Service (CTOS), Credit Bureau Malaysia (CBM), Central Credit Reference Information System (CCRIS), and Suruhanjaya Syarikat Malaysia (SSM). By investing in modern technology infrastructure, banks and FIs can effectively overcome technological barriers like integration issues and data silos. 

In addition, to resolve the issue of data silos, banks and FIs can even improve search functionalities within banking databases to facilitate more efficient and intuitive information retrieval for employees. To be more specific, banks and FIs can integrate Gen AI-powered intelligent search algorithms into the bank’s and FI’s database systems to enhance search capabilities by understanding natural language queries and context. By leveraging semantic search techniques and machine learning models, these systems can deliver more accurate and contextually relevant search results.​ In other words, if banks and FIs can address the integration issues and data silos, they can definitely be more customer-centric and competitive in the banking industry.

Conclusion

Customer centricity is not a one-time project; it’s an ongoing commitment. As banks and FIs experience digital disruption and evolving customer expectations, prioritising the customer experience emerges as a key differentiator for success. In other words, banks and FIs must prioritise understanding and fulfilling customer needs, leveraging advanced technologies, and fostering a culture of innovation and responsiveness. By embracing these principles, banks can not only enhance customer relationships but also drive long-term growth and success in an increasingly competitive industry. Ultimately, the future of banking lies in recognising that each transaction represents an opportunity to build trust, deliver value, and create meaningful connections with customers.

About JurisTech

JurisTech is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies globally.

We power economies by reimagining financial services with cutting-edge software solutions, which includes artificial intelligence (AI), auto-decisioning, digital customer onboarding, loan origination, credit scoring, loan documentation, litigation, and debt collection. 

Our solutions have enabled businesses across a broad array of industries to undergo digital transformation, providing enhanced customer experiences and, most importantly, achieving their business goals.

The post How to Achieve Customer Centricity in Banking? appeared first on JurisTech.

On the 5th of April, JurisTech was thrilled to announce the winner for this year’s John Lim Award 2024 for celebrating extraordinary achievements in the innovation of technology. The award, which carries a winning prize of RM 2,000, underscores JurisTech’s commitment to recognising excellence in software engineering within our organisation and our affiliated company, iMoney. 

Moreover, this annual award not only provides software engineers (SEs) with well-deserved recognition but also instils a profound sense of fulfilment. Aligned with JurisTech’s core values (GECO values), the award remains committed to seeking out and inspiring talented engineers, providing them with platforms to showcase their groundbreaking innovations and recognising their exceptional accomplishments.

From left: John Lim, Hosein Abedinpourshotorban, Kiarash RazaghiAval and Sam Foo

This year’s panel of judges, comprising esteemed leaders such as John Lim, Chief Technology Officer (CTO), Hosein Abedinpourshotorban, Chief Innovation Officer (CINO), Kiarash RazaghiAval, Chief Information Officer (CIO), and Sam Foo Chee Sum, Deputy CIO, undertook a rigorous evaluation process to identify the project that best exemplified technical innovation and its impact on our company and customers.

Tan Shen Zhe

Tan Shen Zhe emerged as this year’s award recipient, celebrated for his groundbreaking contributions that have propelled JurisTech to new heights. Shen’s innovative approach to workflow optimisation, particularly his acceleration of the ClickUp card creation process, has significantly enhanced our overall response efficiency. His achievement, particularly noteworthy as he has self-taught software engineering in addition to his role as a Business Analyst, serves as an inspiring example to aspiring innovators within JurisTech and iMoney.

Tan Shen Zhe virtually presenting the problem statements to the judges. 

Previously, the manual review of tickets generated by our ticketing system and the creation of corresponding ClickUp cards by JurisTech’s Business Analysts were necessary. Shen’s implementation has streamlined this process, reducing wait times for SEs and idle time between ticket receipt and ClickUp card creation. This optimisation has not only enhanced overall response efficiency but also allowed product teams to allocate more time to strategic Business Unit activities, thereby improving accuracy and reliability in managing and responding to customer tickets.

From left: Abirukmani Venkatachalam, Mohamad Anwar Bin Kollacheri Ebrahim Kutty and Ng Lik Sern

In addition to the winner, the judges also recognised two honorable mentions: Abirukmani Venkatachalam for her BoM Configurator, which streamlines the process of creating bill of materials for infrastructure proposals, and Mohamad Anwar Bin Kollacheri Ebrahim Kutty and Ng Lik Sern for their One Page Account Debugger, which centralises key information for account case identification numbers onto one screen, facilitating easy debugging and expediting client support.

The shortlisted candidates presenting their project to the esteemed judges.

As we celebrate the accomplishments of Tan Shen Zhe and our honorable mentions, we are reminded of the endless possibilities that arise when passion and dedication intersect with opportunity. As we look to the future, let us continue to embrace the spirit of innovation, pushing boundaries, and inspiring each other to reach new heights of excellence. Congratulations to all the recipients, and here’s to many more groundbreaking achievements in the coming years.

JurisTech is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies globally.

We power economies by reimagining financial services with cutting-edge software solutions, which includes artificial intelligence (AI), auto-decisioning, digital customer onboarding, loan origination, credit scoring, loan documentation, litigation, and debt collection. 

Our solutions have enabled businesses across a broad array of industries to undergo digital transformation, providing enhanced customer experiences and, most importantly, achieving their business goals.

The post John Lim Award 2024: Celebrating New Innovations in Software Engineering appeared first on JurisTech.

On March 8, 2024, JurisTech, in collaboration with esteemed partners Sunline, Huawei, Cardzone, and Cloudpoint, hosted the Asian Financial Leaders Forum 2024 Malaysia. The event successfully invited over 100 experts and leaders from various fields, especially from the banking and finance sector, to delve into the theme “Navigating the Future of Finance” through the lens of innovation and cutting-edge technologies.

JurisTech’s COO, Naaman Lee (middle), together with the esteemed leaders and the audience.

Kicking off the forum, Jack Wang, the Managing Director of Sunline, initiated the event with a compelling opening speech and warmly welcomed the invited speakers. The speakers of the forum included Naaman Lee, JurisTech’s Chief Operating Officer, Ken Siew, Chief Solutions Officer at Sunline, Muhamad Fahmi bin Mustafa, Head of Islamic Banking at Sunline, Lim Huck Siang, Chief Digital Officer for the Asia-Pacific region at Huawei, and Chin Min Fei, CEO of Cardzone. Each speaker brought a unique perspective to the table, enriching the discourse on the future of finance and technological innovation.

After several industry insights were shared by the invited speakers, Naaman came in to present the topic on “Thriving in the New Era of Innovation.” He  provided a captivating overview of JurisTech’s pivotal role as a leading fintech solutions provider with over 25 years of experience in the financial industry. He delved into the major disruptions that have shaped the financial landscape, highlighting key milestones such as the introduction of ATMs in 1967, online banking in 1994, and the transformative impact of generative AI.

Naaman sharing his insights on the transformative impact of generative AI.

Naaman emphasised the transformative potential of generative AI in the financial services sector, drawing parallels to historical innovations like the steam engine. He shared insightful stories, including one about Wells Fargo’s continuous exploration and innovation in the digital realm, showcasing the importance of adapting to changing conditions.

The interactive session included engaging elements such as polling questions, where participants identified challenges in going digital, with cost and return on investment emerging as primary concerns. Naaman also explored potential use cases for generative AI, providing real-world examples and sharing how JurisTech harnesses this innovative technology in its products and processes.

The audience engaging in polling activities on business challenges.

Naaman concluded his presentation with an impactful statement encouraging the audience to seize opportunities in AI and innovation. He reminded them that preparation is key when opportunity knocks.

“It takes speed and power to deliver transformational solutions.” – Naaman Lee, COO of JurisTech

The event wrapped up with a lucky draw, marking the end of a day filled with shared knowledge, diverse perspectives, and forward-thinking strategies from the industry experts and leaders. Following the conclusion of the event, an enriching networking session ensued, providing a conducive environment for speakers and attendees alike to forge new connections and strengthen existing relationships. This interactive platform facilitated meaningful interactions among industry leaders, fostering collaborative discussions and the exchange of innovative ideas. 

Naaman Lee exchanging innovative ideas with Huawei’s Chief Digital Officer, Mr Lim Huck Siang.

JurisTech’s participation in the Asian Financial Leaders Forum 2024 Malaysia not only showcased the company’s commitment to innovation but also positioned Naaman Lee as a thought leader in navigating the dynamic landscape of the financial technology industry. As the sparks from AFLF2024 continue to glow, JurisTech remains at the forefront of transformative solutions, driving innovation in the financial industry.

Naaman receiving a token of appreciation from Sunline’s Managing Director, Mr Jack Wang.

About JurisTech

JurisTech (Juris Technologies) is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies in Malaysia, Southeast Asia, and beyond.

The post JurisTech’s COO Inspires Innovation at the Asian Financial Leaders Forum 2024 Malaysia appeared first on JurisTech.

Introduction

The rapid evolution of artificial intelligence (AI) has been a driving force in reshaping industries across the globe. As we step into 2024, the anticipation for groundbreaking AI trends reaches unprecedented heights. On top of that,  banks and financial institutions (FIs) find themselves at the forefront of this technological revolution, navigating a complex intersection of innovation and financial services. In this article, we will explore the top 4 popular AI trends that are projected to shape the future of AI in 2024. Additionally, we will discuss how these AI trends can benefit banks and financial institutions. This understanding is not just about technological prowess but a strategic investment in the future of financial services.

1. Quantum AI

Quantum AI is an interdisciplinary field that combines principles from quantum computing and AI. In other words, it harnesses the principles of quantum mechanics to revolutionise AI by enabling the development of more powerful AI models capable of processing vast amounts of data and performing complex calculations at an unprecedented speed. This will have a significant impact on various industries, including finance, healthcare, logistics and more.

In the finance context, Quantum AI can significantly impact portfolio optimisation by handling complex mathematical computations involved in analysing multiple investment scenarios simultaneously. For instance, Goldman Sachs and AWS have released a detailed end-to-end assessment of a quantum algorithm for portfolio optimisation, which is a revealing case study on the utility of quantum algorithms. Besides that, Quantum AI provides banks and FIs with the ability to predict market trends and assess potential risks with unparalleled accuracy. Woerner and Egger have proved that a quantum algorithm analyses risk more efficiently than Monte Carlo simulations traditionally used on classical computers, offering a more accurate and efficient approach to risk assessment. 

On top of that, Google has developed Google Quantum AI, a division of Google that is focused on advancing the state of the art in quantum computing and developing the hardware and software tools to operate beyond classical capabilities. The potential applications of Google Quantum AI in finance and banking are significant, including portfolio optimisation, risk assessment, and more. However, the adoption of quantum computing in finance and banking is still in its early stages, and there are significant challenges to overcome, including data quality and security concerns.

2. Generative AI

Generative AI refers to a class of artificial intelligence systems that have the ability to generate new content, such as text, images, audio, or other forms of data. ChatGPT, Google Bard, MidJourney and Bing AI are some of the examples of generative AI that are widely utilised by individuals from different industries nowadays. 

A report by MarketResearch.biz forecasts that the global market size for generative AI in financial services will soar to around USD 9,475.2 million by 2032, a substantial increase from USD 847.2 million in 2022. This growth is expected to be driven by a Compound Annual Growth Rate (CAGR) of 28.1% during the period from 2023 to 2032. The potential of generative AI in the finance and banking sectors is substantial, with McKinsey & Co. reporting that on an annual basis, generative AI could add between $200 billion and $340 billion in value (9%-15% of banks’ operating profits) if the use cases are fully implemented.

In particular, generative AI can automate the tedious task of report generation for financial analysts, allowing them to focus on more strategic aspects of their work. Moreover, generative AI can even provide clients with tailored market insights, and more sophisticated credit risk assessment through analysing large datasets to identify patterns, trends, and correlations. Banks and FIs can even adopt explainable and automated Machine Learning (AutoML) and AI platforms that can make predictions through analysing vast amounts of historical data. As a result, generative AI can assist banks and FIs effectively improve efficiency and profitability over time.

3. Composite AI

Composite AI, which involves the combination of multiple AI techniques to create more powerful and accurate AI systems, is anticipated to be a significant trend in 2024. It leverages various AI and analytic techniques, such as machine learning (ML), deep learning, natural language processing (NLP), computer vision, descriptive statistics, knowledge graphs to improve AI systems’ learning level of “common sense” and ability to solve a wide range of business problems. 

Composite AI can enhance existing rule-based systems by combining techniques such as NLP, machine learning, and deep learning to detect fraudulent transactions more accurately and efficiently. Dr Bernd Schopp also asserted that composite AI can help banks and FIs manage and mitigate risks more effectively and even improve the sales pipeline. This clearly shows that banks and FIs truly require an AI-driven platform that combines ML techniques to make intelligent business decisions and gain insights.  

4. Edge AI

Edge AI brings the power of AI to the edge devices, such as smartphones, tablets, and Internet of Things (IoT) devices. Unlike traditional AI models that rely on centralised cloud computing, edge AI processes data locally on the device, providing real-time insights and reducing the need for constant connectivity. According to Grand View Research, the global edge AI market size was valued at USD 14,787.5 million in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 21.0% from 2023 to 2030. This clearly indicates that edge AI is projected to be a prominent trend in 2024.

Edge AI can enhance real-time fraud detection by processing data directly on devices, allowing for immediate response to potential threats without relying on centralised systems. In mobile banking applications, it enhances user experiences by locally analysing behavior and preferences, ensuring a seamless and personalised interface. This enables customers to effortlessly leverage AI on their devices, assisting banks and FIs in accelerating the time-to-market for their financial products and facilitating cross-selling. Moreover, edge AI facilitates seamless customer onboarding by processing and analysing data directly on users’ devices. By harnessing the power of edge AI, banks and FIs can offer a more efficient and user-friendly onboarding experience.

In Conclusion

It is essential for banks and FIs to stay informed about these trends in order to leverage these advancements to drive innovation and improve operational efficiency. In order to do so, banks and FIs can wisely exploit the potential of AI by implementing JurisTech’s explainable automated ML and AI platform. Banks and FIs can seamlessly integrate our autoML platform  to their operations to effortlessly make predictions and intelligent business decisions. As banks and FIs embrace these transformative AI trends, it becomes evident that staying abreast of technological innovations is not merely an option but a strategic necessity. The convergence of these trends reflects a commitment to efficiency, innovation, and customer-centric solutions, paving the way for a dynamic and promising future in the finance and banking industry. 2024 presents unparalleled opportunities for those willing to embrace and harness the potential of AI.

About JurisTech

JurisTech (Juris Technologies) is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies in Malaysia, Southeast Asia, and beyond.

The post 4 Popular AI Trends in 2024 You Need to Know appeared first on JurisTech.

From left: Fairuz Suzana binti Hj Kamaruddin, CIO of PNB; See Wai Hun, CEO of JurisTech and iMoney; Tan Sri Muhammad Izzat bin Hj Abdul Aziz, CTO of PNB; Suzana Ahmad, CRO of PNB; Patrick Hew, CTO of Paywatch; Reza Baharin, Head of Fixed Income of PNB; Ravinder Singh, Co-Founder and CCO of AQM Technologies

Reza Baharin, who serves as the Head of Fixed Income at PNB, was the moderator for the panel discussion. In addition to Wai Hun, the two panel speakers who contributed valuable insights were Patrick Hew, Chief Technology Officer of Paywatch, and Ravinder Singh, Co-Founder & Chief Commercial Officer of AQM Technologies. Together, these industry leaders shared their perspectives on navigating innovation through the fail-fast philosophy.

Despite Wai Hun representing iMoney at the event, her insights resonated deeply with JurisTech’s commitment to a culture of innovation and growth, echoing the company’s core values of “growing heroes”. The panel delved into the intricacies of cultivating a growth mindset, viewing challenges as opportunities for learning and advancement.

Wai Hun enthusiastically sharing her insights with panel speakers and audiences.

One pivotal question directed at Wai Hun explored her experiences as a leader in instilling a fail-fast mindset within her companies. Her response illuminated the delicate balance required to cultivate such a culture. To be more specific, she revealed that within JurisTech and iMoney, the fail-fast philosophy is ingrained through a carefully constructed reward and punishment system. 

Furthermore, Wai Hun emphasised that failure serves as the primary learning platform within JurisTech and iMoney. To illustrate this approach, she provided an example from iMoney, where a substantial initiative encountered unexpected challenges, leading the company to swiftly reassess and pivot. She highlighted this quick response as a prime demonstration of the fail-fast philosophy in practice.

Today, JurisTech and iMoney approach new initiatives with a systematic breakdown into smaller parts, implementing incremental changes, and subjecting them to rigorous A/B testing. The emphasis on A/B testing serves as a cornerstone of JurisTech’s and iMoney’s strategy, reflecting a commitment to evolving and refining initiatives incrementally, regardless of the industry or specific project. 

Wai Hun emphasising the importance of A/B testing in JurisTech’s and iMoney’s initiatives.

Moreover, another probing question from the moderator focused on the perception of failure hindering innovation. Wai Hun’s response delved into the profound role of culture in shaping these perceptions. She emphasised that without intentional efforts to change the culture, it remains stagnant. The creation of a culture, she noted, starts with a single person and permeates through shared responsibility and shared benefits.

“Everything has to be fostered, and everything has to be intentional,” Wai Hun emphasised, underlining the deliberate effort required to shape a conducive environment for innovation. This intentional culture, rooted in shared responsibility, aligns seamlessly with JurisTech’s and iMoney’s ethos of “growing heroes.” The belief that challenges are not insurmountable obstacles but stepping stones toward growth and learning resonates deeply within the companies.

“Embracing failure is crucial, as it serves as the greatest platform for profound learning and development.” – See Wai Hun

Wai Hun’s continuous emphasis on A/B testing became a resounding key message. As she actively engaged with the audience at the end of the event, she further reinforced this crucial practice. The culture at JurisTech and iMoney, she iterated, mandates A/B testing for any significant initiative. This ensures that the companies not only adapt swiftly to challenges but thrives in the iterative process of innovation.

In conclusion, the panel discussion at PNB provided a platform for Wai Hun to showcase JurisTech’s and iMoney’s unwavering commitment to fostering a fail-fast culture and a growth mindset. The insights shared reflected JurisTech’s and iMoney’s core values and strategic approach, highlighting the companies’ position at the forefront of innovative practices in the fintech and financial industries.

About JurisTech

JurisTech (Juris Technologies) is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies in Malaysia, Southeast Asia, and beyond.

The post JurisTech’s CEO Unveils Fail-Fast Insights at PNB Technology Week appeared first on JurisTech.

On 23rd November, the Faculty of Computer Science and Information Technology at Universiti Malaya hosted JurisTech for a captivating career talk themed “From Classroom to Company: Understanding Evolving Employability Trends”. Sheryl Chong, HR Manager, and Kiarash Razaghi Aval, Chief Information Officer at JurisTech, warmly welcomed 18 first-to-third year software engineering students through a transformative exploration of employability trends and the values that JurisTech earnestly seeks in the next generation of tech leaders.

The session kicked off with a spirited ice-breaking activity, setting the tone for an interactive and enlightening experience. Sheryl took the stage, giving a warm introduction to JurisTech and a glimpse into the company’s remarkable evolution and accomplishments. Notable awards and accolades adorned JurisTech’s journey, establishing it as top leader in the fintech industry.

Before Sheryl introduced the culture of JurisTech, she prompted reflective questions that encouraged students to envision their ideal work environments. The talk delved into essential qualities sought by employers, with a focus on teamwork and excellence. Drawing on JurisTech’s commitment to quality and resourcefulness, Sheryl challenged students to ponder their readiness for the professional arena.

Sheryl delving into the qualities and values that JurisTech prioritises

A captivating exploration of JurisTech’s culture unfolded as Sheryl outlined the company’s GECO values (Growing Heroes, Making Excellence Happen, Customer First, and Opening Up). These are the fundamental values that form the essence of JurisTech’s operations. These principles steer our employees in fostering positive work environments and maintaining high standards in their respective roles. 

The spotlight then shifted to Kiarash, who shared his remarkable journey at JurisTech, illustrating how dedication, innovation, and a pursuit of quality can propel one’s career to new heights. He actively encouraged students to embrace a proactive mindset and continually strive for excellence in both their academic studies and work as a software engineer. Students also gained valuable insights into the role of Software Engineers at JurisTech, the technology stacks employed, and a myriad of benefits from being part of JurisTech’s dynamic environment. 

Kiarash also underscored JurisTech’s open culture, growth opportunities, and the exciting career path awaiting software engineering enthusiasts. Kiarash then moved to engage with the students in an interactive Q&A session, to share with them valuable career insights to kickstart their careers as Software Engineers. The active participation of students in the dialogue with Kiarash not only enriched their understanding of the industry but also provided them with practical advice and a direct connection to real-world experiences in the field.

Kiarash ecstatically sharing his advices to software engineering students at Universiti Malaya

Sheryl returned to the stage to walk through JurisTech’s hiring process, encouraging students to scan and register for potential opportunities. The event concluded on a high note, with students armed with a deeper understanding of the fintech landscape, JurisTech’s guiding values, and the vital insights needed to embark on their professional journeys as a software engineer.

As JurisTech continues to bridge the gap between graduates and industry demands, Sheryl and Kiarash reiterated JurisTech’s commitment to nurturing the next generation of tech leaders, fostering innovation, and shaping the future of fintech in Malaysia and beyond.

JurisTech and Universiti Malaya exchanging tokens of appreciation

About JurisTech

JurisTech (Juris Technologies) is a leading fintech company, specialising in enterprise-class software solutions for banks, financial institutions, telecommunications, and automobile companies in Malaysia, Southeast Asia, and beyond.

The post Universiti Malaya Welcomes JurisTech: Understanding Evolving Employability Trends appeared first on JurisTech.

Introduction

In today’s hyper-competitive business landscape, the banking industry is witnessing a transformation in how customers are onboarded. Banks and financial institutions (FIs) strive to optimise their customer onboarding processes with Artificial Intelligence (AI). This is because customer onboarding is more than just a routine process. Instead, it is the first touchpoint between customers and banks or FIs when introducing financial products to customers. This means that it is a pivotal moment that can determine the success or failure of a customer relationship. According to PWC, 73% of users consider customer experience a determining factor in their decisions. Thus, effective onboarding is crucial as it can establish a positive first impression and significantly enhance customer satisfaction and loyalty.

Traditionally, customer onboarding has been a labor-intensive process involving paperwork, face-to-face meetings, and repetitive data entry. However, the emergence of AI has brought about a transformative wave in how this critical process is conducted. 77% of bankers assert that effectively leveraging AI will differentiate winning banks from losing ones. Furthermore, Business Insider Intelligence found that 75% of respondents, primarily banks with assets exceeding US$100 billion, actively utilise AI. Therefore, this article will explore the profound significance of AI in seamless customer onboarding within the banking industry.

What is customer onboarding and AI 

Before we proceed, what is customer onboarding in the banking context? Customer onboarding is the process by which banks or FIs welcome and integrate new customers into their systems and services. Specifically, it involves collecting information from customers, verifying their identity through electronic Know Your Customer (eKYC), and establishing necessary accounts.  In other words, it is the initial interaction between banks or FIs and clients, involving data collection, account creation, and relationship building. The process aims to establish a positive experience for customers while meeting regulatory requirements and minimising risks for banks and FIs.

AI, in the context of customer onboarding, refers to the application of AI technologies to automate, streamline and enhance various aspects of the onboarding process. These technologies include Optical Character Recognition (OCR), chatbot and more. AI-driven solutions have the capacity to revolutionise customer onboarding by reducing manual tasks, increasing efficiency, and providing 24/7 accessibility.

Why is AI important In enhancing the customer onboarding process?

Streamlined onboarding processes

One of the benefits of implementing AI in customer onboarding is the ability to streamline and automate various aspects of the process. Traditional onboarding procedures often involve a significant amount of paperwork, manual data entry, and repetitive tasks. AI technologies can eliminate much of this manual effort by automating data collection, verification, and document processing. By streamlining onboarding processes, banks and FIs can even handle higher volume of onboarding requests within the same timeframe. Therefore, the implementation of AI in the customer onboarding process can enhance efficiency, ultimately resulting in greater user experience. 

24/7 accessibility

AI-driven onboarding solutions offer the advantage of being available 24/7, breaking free from the constraints of traditional business hours. Customers can initiate their onboarding journey at their convenience, whether it’s during the day, late at night, or on weekends. This flexibility aligns with the modern customer’s expectations for instant access to financial services and information. A survey revealed that 53% of respondents are frustrated by long response times when interacting with businesses. Consequently, it is crucial for banks and FIs to allow their customers to initiate their onboarding journey anytime and anywhere. By doing so, banks and FIs can effectively enhance customer experience and satisfaction.

Time and Cost Saving 

With streamlined and automated onboarding processes, it reduces the time and cost it takes to onboard a new customer. To be more specific, it reduces costs associated with manual labour, paperwork, and lengthy onboarding procedures. At the same time, it also decreases the time required for data collection, verification, and document processing. Thus, banks and FIs can serve more customers with fewer resources, ultimately leading to significant time and cost savings. 

Improved human resources allocation

Furthermore, AI can help banks and FIs better allocate their human resources. Employees who were previously engaged in manual data entry and administrative tasks can be reassigned to more value-added roles. For instance, banks and FIs can reallocate their employees to relationship management or address complex customer needs. This not only improves overall employee satisfaction but also ensures that employees can focus on tasks that require human expertise.

What and How AI technologies can create a seamless onboarding process

Optical Character Recognition (OCR)

Firstly, OCR is one of the AI technologies that banks and FIs should implement for seamless customer onboarding journeys. It enables the conversion of various types of documents, such as identification cards, passports, and other documents into machine-readable text. Moreover, OCR can also convert scanned or photographed images into text. Particularly, OCR can accurately extract essential information from documents, such as names, addresses, and identification numbers. This means that it can eliminate the need for manual data entry, reduce errors, and speed up the verification process. By implementing OCR to simplify and speed up customer onboarding processes, it helps banks and FIs save cost and time. With AI technologies like OCR, banks and FIs can establish a seamless onboarding process for their customers. 

Chatbot

Chatbots are AI-powered virtual assistants that can engage with customers in natural language, addressing inquiries and assisting with the onboarding process. Chatbots are available 24/7, ensuring that customers receive instant responses to their questions and guidance throughout the onboarding process. This means that customers no longer need to wait for a human agent to be available to answer their queries or guide them through the onboarding process. Interestingly, 62% of them prefer to engage with a chatbot instead of waiting for 15 minutes or more to speak with a human representative. In addition, chatbots can achieve a potential 30% reduction in customer service costs by handling up to 80% of routine inquiries. This instant assistance enhances customer satisfaction and reduces the risk of customers abandoning the process due to frustration or uncertainty.

Conclusion

In conclusion, the integration of AI technologies in customer onboarding offers a myriad of benefits to banks and FIs. It streamlines processes, enhances accessibility with 24/7 availability, saves time and cost, and optimises the allocation of human resources. OCR and chatbots are some examples of how AI is revolutionising the way customers onboard with banks and FIs. However, to truly leverage the power of AI in customer onboarding, it is crucial to choose a trusted and reliable platform. This is where JurisTech’s AI-driven customer onboarding platform can make all the difference. With its advanced AI technologies, including OCR and chatbot functionalities, JurisTech’s platform is able to provide a seamless onboarding experience. You not only enhance efficiency and customer satisfaction but also ensure that your business stands to become a leader in this technological revolution. Embracing AI in customer onboarding is not merely an option; it is a strategic imperative.

About JurisTech

JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.

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Introduction

The world of finance is undergoing a remarkable transformation, driven by the relentless march of technology. In this era of digital innovation, financial technology (fintech) companies are at the forefront, revolutionising financial services and introducing new paradigms that promise greater efficiency, accessibility, and customer-centricity. One area where this transformation is particularly profound is in the origination of loans, where the integration of Artificial Intelligence (AI) and automation has brought about seismic changes.

Notably, the market growth of AI  in the fintech sector surged from US$ 9.15 billion in 2022 to US$ 11.59 billion in 2023, reflecting a robust compound annual growth rate (CAGR) of 26.8%. Furthermore, AI in the fintech market is anticipated to achieve a CAGR of 28.6% and reach US$ 31.71 billion by 2027. These statistics indicate that banks and financial institutions (FIs) nowadays should embrace AI and automation within their loan origination processes to remain competitive. This article delves into the transformative influence of AI and automation in loan origination, offering a comprehensive understanding of their roles, advantages, and the remarkable synergy they create.

The Traditional Loan Origination Process

Historically, the traditional loan origination process has typically involved labor-intensive and time-consuming procedures. Borrowers would visit banks or FIs to submit physical loan applications, often involving extensive paperwork. Bank employees would manually enter applicant information, initiate credit checks, and manually verify submitted documents, such as income statements, identification papers and more. Complex underwriting processes, often reliant on human judgment, determined the approval or rejection of loans. Communication of loan decisions to applicants could take days or even weeks, resulting in extended waiting periods. This conventional approach not only contained errors but also impeded efficiency, leading to prolonged approval times and customer frustration. To boost efficiency and gain a competitive edge, banks and FIs should consider implementing an AI-driven loan origination system.

The Role of AI in Loan Origination

Credit risk assessment

AI plays a pivotal role in enhancing credit risk assessment. Unlike traditional methods that rely primarily on historical data and credit scores, AI can analyse a broader range of data sources. This includes unconventional data points such as social media activity and transaction history, offering a fuller picture of creditworthiness. Moreover, AI’s ability to identify patterns and trends within these diverse datasets enables more accurate predictions of credit risk. This not only improves the quality of lending decisions but also mitigates the risk of defaults, benefiting both lenders and borrowers.

Efficient Document Verification

On top of assessing credit risk, AI streamlines the document verification process. AI-powered document verification offers several advantages in loan origination. Optical Character Recognition (OCR) technology, for instance, efficiently captures and digitises textual content from documents, eliminating the tedious and error-prone manual data entry tasks. This acceleration of the document processing stage translates into quicker loan application approvals and reduces the likelihood of inaccuracies that may result from human input.

Effective fraud detection

Furthermore, AI also plays a pivotal role in helping banks and FIs to identify and prevent fraudulent loan applications. Specifically, AI can continuously analyse a wide array of data points in real-time to detect anomalies and suspicious patterns, safeguarding banks and FIs against fraudulent activities. This means that AI’s ability to detect unusual patterns and behaviors in real-time significantly enhances fraud prevention. Therefore, banks and FIs should adopt AI in their loan origination processes as it can analyse transaction data, identify suspicious activities, and flag potential fraud cases.

The Role of Automation in Loan Origination

Streamlining workflows

Automation is key to streamlining the loan origination process. Routine tasks such as data entry, document verification, and communication with applicants can be automated. This leads to quicker approvals, less human error, saving time and effort in the loan application process. In other words, automated workflows ensure that tasks are completed efficiently, without the delays associated with manual processing. Therefore, automation virtually eliminates data entry errors and reduces the need for manual corrections.

Ensuring compliance and documentation

In the highly regulated financial industry, compliance with legal and regulatory requirements is paramount. Automation ensures that all necessary documentation and regulatory checks are carried out accurately and within stipulated time frames. This reduces the risk of non-compliance and potential legal complications. Automated systems can cross-check documents, verify identities, and ensure that banks and FIs receive all necessary disclosures. This level of automation ensures that every loan application adheres to regulatory standards.

Scalability

Additionally, automation can also empower banks and FIs to efficiently expand and manage their loan origination processes. It ensures a uniform and error-free approach, regardless of the quantity of loan applications received. This becomes particularly significant when catering to a growing customer base. Automation maintains service quality and boosts loan processing capacity without requiring a proportional staff increase. On top of that, this scalability is pivotal for banks and FIs aiming for swift and sustainable growth. 

The synergy of AI and automation

The true power of improving loan origination is unlocked when AI and automation synergise. Specifically, it enables banks and FIs to automatically analyse vast amounts of data sources within a short timeframe. Furthermore, banks and FIs can automate and streamline workflows, reducing the chances of fraudulent activities and human errors. With that being said, the integration between AI and automation in the loan origination process enables faster and more accurate data-driven decision-making. In addition, it not only improves efficiency and effectiveness but also boosts customer satisfaction. Therefore, banks and FIs must employ AI and automation to enhance loan origination efficiency for sustained competitiveness.

Conclusion

The integration of AI and automation into the loan origination process represents a significant leap forward in finance industry. These technologies not only streamline the process but also enhance its accuracy and customer-centricity. Loan origination, once plagued by inefficiencies and delays, is now a more efficient, precise, and customer-friendly experience. To remain at the forefront of innovation, let’s consider exploring JurisTech’s AI-driven loan origination system—a strategic choice to revolutionise your lending endeavors. Embrace the future of lending with JurisTech today and lead the way toward a more efficient and customer-centric financial landscape.

About JurisTech

JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.

The post How to Improve Loan Origination with AI and Automation appeared first on JurisTech.

From August 16th to September 12th, JurisTech and iMoney (a consumer arm of JurisTech) embarked on a remarkable journey filled with camaraderie, intense competition, and unforgettable moments. Juris Olympics 2023, spanning an impressive five weeks, has brought employees together in ways we could only have imagined. The event consisted of nine games, including chess, Valorant, pool, mahjong, FIFA 23 Xbox, badminton, table tennis, foosball, and Amazing Race. With nine exciting games and activities, this event was more than just a competition; it was an opportunity to build stronger bonds and improve internal communication while having an absolute blast. This extraordinary event brought together employees from every corner for a month of exhilarating competition, unparalleled camaraderie, and a profound alignment with the company’s core values, or GECO values for short – Growing Heroes, Making Excellence Happen, Customer First, and Opening Up.

A Bonding Experience Beyond the Games

Juris Olympics was not just about competition; it was about fostering deeper connections among employees. Employees from various units formed teams, fostering opportunities for them to interact with colleagues they might not have otherwise met. These interactions nurtured a sense of unity, breaking down silos, and making it abundantly clear that at JurisTech, we are all part of one big family.

Employees of JurisTech and iMoney created unforgettable memories during Juris Olympics

Living GECO Values

As the games unfolded, it proved that the core values of the company were not just slogans but principles that employees embraced wholeheartedly:

Growing Heroes

The “Growing Heroes” aspect of Juris Olympics was more than just a catchy phrase; it was a genuine opportunity for employees to embark on a journey of personal and professional growth. Throughout the competition, individuals found themselves stepping into leadership roles they might not have otherwise considered. They had to make strategic decisions, rally their teams, and inspire each other to excel. These experiences nurtured leadership skills, helping employees discover the heroes within themselves.

Laura Tsen, JurisTech’s Marketing Manager guided participants through a pre-game warm-up session

Making Excellence Happen

In the spirit of “Making Excellence Happen,” participants approached each game with an unwavering commitment to excellence. Whether they were playing chess, foosball, or any other game, the goal was to push their limits and reach the pinnacle of their performance. Juris Olympics became a microcosm of JurisTech’s commitment to continuous improvement. In every game, participants strived for excellence, pushing their limits and aiming for the highest level of performance. The spirit of continuous improvement was palpable.

Customer First

The value of “Customer First” reverberated throughout Juris Olympics. In each game, teams worked together, placing the needs and aspirations of the collective above personal interests. Every victory was a testament to the dedication of teams working tirelessly to satisfy the ultimate ‘customer’ – JurisTech’s success. This emphasis on teamwork mirrored the company’s commitment to putting the customer at the center of everything. It demonstrated that, just as we strive to exceed customer expectations in our external interactions, we also prioritise collaboration and mutual support within our internal teams. 

Opening Up

The diversity of games and participants in Juris Olympics encouraged employees to open up to new experiences and embrace a broader perspective. It was a reflection of the company’s commitment to embracing change and innovation. Through these diverse challenges, participants were exposed to a variety of skills, strategies, and ways of thinking. This value was not confined to the games alone; it extended to the workplace. It encouraged employees to be open to new ideas, diverse viewpoints, and innovative approaches in their daily tasks.

The participation of iMoney in Juris Olympics 2023 added an extra layer of vibrancy to this extraordinary event. It symbolised the collaborative strength and unity within the JurisTech family.  The presence of iMoney demonstrated how different facets of the business could seamlessly come together to embody JurisTech’s core values.

Ken Yap (left), General Manager of iMoney Group partnered with JurisTech’s employee during badminton tournament 

Strengthening Internal Communication

Throughout Juris Olympics, employees from different units and levels of the business came together to form teams, fostering connections that went beyond the confines of their daily roles. Whether strategising in chess or coordinating in an Amazing Race challenge, participants had to communicate effectively to succeed. This event served as an exceptional platform for breaking down communication barriers and building trust among colleagues.

Team discussion before the start of the game

Breaking Down Hierarchies

One of Juris Olympic’s attributes was its ability to break down workplace hierarchies. During these five weeks, job titles and positions took a backseat as employees from all levels collaborated, strategised, and cheered each other on. In this unique environment, all participants were on equal footing, bound by their shared passion for the competition and their mutual support for one another. It demonstrated that at JurisTech, unity knows no hierarchy, and every employee, regardless of their role, is a valued member of our extended family. 

Naaman Lee, JurisTech’s COO playing pool with an intern during Juris Olympics 

The Competitive Spirit

Competition was fierce, but it was always infused with a spirit of sportsmanship. Participants displayed remarkable dedication and sportsmanship in their quest for victory. From heart-stopping Foosball matches to thrilling table tennis tournaments, every game was a testament to the competitive spirit that drives JurisTech’s success.

See Wai Hun (right), JurisTech’s CEO raising her competitive spirit during the table tennis tournament

The success of Juris Olympics 2023 has set a remarkable precedent for future events within JurisTech. On top of that, it has shown that when we align our actions with our core values, we can achieve exceptional results and build lasting bonds. As we move forward, we continue to carry the spirit of Juris Olympics with us, knowing that we are not just colleagues but members of a close-knit family, united by our shared values.

About JurisTech

JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.

The post A Month To Remember: How Juris Olympics 2023 Became More Than Just A Competition appeared first on JurisTech.

Introduction

In the dynamic landscape of today’s digital world, Artificial Intelligence (AI) has emerged as a transformative force, reshaping traditional norms and propelling industries toward unprecedented advancements. Among these industries, the banking industry has witnessed remarkable transformations, thanks to the impressive strides made by AI. Increasingly, banks and financial institutions (FIs) are recognising the immense potential of AI and are leveraging its capabilities to elevate their credit risk management practices to new heights. 

Credit risk management plays an essential role in the banking industry as it assists banks and FIs to assess and minimise the likelihood of borrowers or counterparties failing to meet their financial obligations. The implementation of AI in credit risk management offers numerous benefits, including identification of potential risk, fraud detection, real-time monitoring, automated processes, accuracy in predictions, and reduction of credit management time. These advancements enable banks and FIs to enhance their risk mitigation strategies, improve decision-making processes, and ultimately strengthen their overall credit risk management framework.

While embracing AI in credit risk management promises a myriad of advantages, it also presents various challenges that need to be navigated. These include data quality and availability, bias and fairness, and data privacy and confidentiality. Let’s delve into the pivotal role played by AI in credit risk management, examining its wide-ranging benefits, the challenges it poses, and the best practices in AI-driven credit risk management. 

Limitations of Traditional Credit Risk Management

Insufficient data analysis

Before the advent of AI, one of the limitations of traditional credit risk management is insufficient data analysis. Insufficient data analysis is a common issue, as banks and FIs rely on manual processes and limited datasets to evaluate creditworthiness and make credit decisions. Without sufficient data analysis, the risk of making incomplete or inaccurate risk assessments will definitely increase. 

Subjectivity

Another limitation of traditional credit risk management is subjectivity. Traditional credit risk assessment normally relies on the subjective judgment of decision makers, where everyone has different risk appetites, experiences, biases and perceptions. That being said,  it can lead to inconsistency and bias in decision-making, and can even result in potential misjudgements as humans are usually subjective in nature. 

High cost and time-consuming

Traditional credit risk management often involves lengthy procedures for assessing creditworthiness. These procedures included manual credit scoring, financial analysis, and evaluation of collateral, requiring extensive time and expertise. In other words, traditional credit risk management is likely to limit the ability of banks and FIs in making prompt credit decisions as it is time-consuming, and this can even increase their operating cost. 

Implementation of AI in Credit Risk Management

Risk identification

The implementation of AI in credit risk management is an initiative that should be taken by most banks and FIs nowadays as it can assist them in identifying risk. In particular, AI algorithms can analyse vast amounts of historical credit data more efficiently and accurately than traditional methods. By recognising patterns and trends in past credit behaviour, AI can identify potential risks associated with specific borrowers or industries. Therefore, AI enables banks and FIs to make better-informed decisions while minimising risks.

Fraud detection

The expenditure on financial fraud detection platforms that utilise AI is projected to surpass $10 billion globally by 2027, as per Juniper Research’s findings. On top of that, AI technologies, specifically machine learning (ML) algorithms, have the capacity to examine large volumes of data and identify patterns and irregularities that could potentially signify instances of fraudulent activities.This clearly indicates that more banks and FIs will start adopting AI-driven credit risk management as they can assist them in detecting fraud over time. 

Automated process

According to 14% of market professionals, AI scoring systems have already demonstrated superior performance compared to human-based ones. AI algorithms possess the capability to undergo training for repetitive and time-consuming tasks, like data entry and analysis, with significantly increased speed and precision compared to human counterparts. This implies that more banks and FIs should implement AI in credit risk management as it enables automated processes which can result in greater efficiency. 

Reduction of credit risk management time

One of the greatest benefits that AI has brought to humans is to improve efficiency. Traditional credit risk management normally requires banks and FIs to invest considerable time in manually verifying applications. By implementing AI in credit risk management, the time required by credit risk management has reduced significantly as banks and FIs can decrease the reliance on manual processes. 

Challenges of AI in Credit Risk Management

Data quality and availability 

One of the primary challenges faced by AI in credit risk management is the data quality and availability. AI algorithms heavily rely on vast amounts of historical data to make accurate predictions and decisions. However, banks and FIs often face difficulties in obtaining high-quality, comprehensive, and up-to-date data. Incomplete or outdated data can lead to inaccurate credit risk assessments, potentially impacting the overall risk exposure of the institution.

Bias and fairness

AI algorithms are susceptible to inheriting biases present in historical data, leading to potential discrimination in credit risk assessment. The historical data may contain algorithmic bias, which could adversely affect certain groups of individuals or businesses. When AI models perpetuate these biases, it raises ethical concerns and may result in unfair credit decisions, hindering financial inclusion. 

Data privacy and confidentiality

As AI in credit risk management requires access to sensitive personal and financial information, data privacy and confidentiality become paramount concerns. Financial institutions have the responsibility to protect customer data from unauthorised access, breaches, or misuse. Failure to do so can lead to severe reputational damage and legal ramifications.

Best Practices in AI-driven Credit Risk Management

High-quality data 

The foundation of any successful AI-driven credit risk management system lies in the quality of the data it utilises. Accurate, comprehensive, and up-to-date data is crucial for building robust AI models capable of making precise risk assessments. Banks and FIs must ensure that their data sources are reliable as it allows AI to generate better predictions and yield more dependable results.

Bias and Fairness Mitigation Techniques 

Banks and FIs should adopt bias and fairness mitigation techniques in their AI-driven credit risk managment. One approach is to conduct regular audits of AI models to identify and address biases. Data scientists can use specialised algorithms to detect bias and introduce corrective measures to mitigate its impact. On top of that, transparency in the credit risk assessment process is also crucial. Banks and FIs should strive to make their AI models interpretable, allowing customers and regulators to understand the factors influencing credit decisions.

Robust Cybersecurity Measures

It is essential for banks and FIs to practice robust cybersecurity measures to protect sensitive customer data and maintain client trust. Specifically, they could implement state-of-the-art cybersecurity protocols, including data encryption, secure data storage, and multi-factor authentication. Regular security audits and vulnerability assessments can help identify and address potential weaknesses in the system. Additionally, educating employees about cybersecurity best practices can reduce the risk of internal security breaches. 

In Conclusion

The integration of AI into credit risk management has emerged as a beacon of transformation in the ever-evolving landscape of banking and finance. AI’s far-reaching benefits extend from enhancing risk assessment accuracy and fraud detection to automating time-consuming processes, ultimately bolstering decision-making and mitigating risks. The remarkable strides made by AI have paved the way for a new era of risk management practices, with innovative platforms like JurisTech’s explainable and automated Machine Learning (AutoML) and AI platform, Juris Mindcraft. Its capabilities span far and wide, from triggering early warning systems that forecast non-performing loans (NPLs) to employing self-curing prediction strategies for delinquent customers. By identifying credit default risks and leveraging alternative credit scoring methodologies, it even addresses the challenges posed by credit-invisible customers, facilitating a more inclusive financial landscape.

Through a commitment to high-quality data, fairness mitigation, and robust cybersecurity measures, banks and financial institutions can navigate the intricate path of AI integration, harnessing its power to forge a more resilient and efficient credit risk management framework. In the convergence of technology and finance, the proactive embrace of AI stands as a testament to the industry’s readiness to shape a future of informed and responsible financial management.

About JurisTech

JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.

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