In the decade following the global financial crisis, banks have faced a flood of new laws and regulations. The pace of change has been furious. Banks have been forced to hire more and more bodies to manage large, enterprise-wide efforts in an attempt to simply stay ahead of regulatory enforcement actions and the ensuing fines and penalties.
Mr. Romesh Sobti, CEO of IndusInd Bank joins International Banker to discuss Indian banking reform, the wider challenges facing banks in India and IndusInd’s goal of doubling profit in the next three years.
Automation saves time, cuts cost and carries out routine tasks with unmatched efficiency, so who wouldn’t welcome it? Possibly the people whose income currently depends on carrying out those tasks. Digitalization is guaranteed to strip out much routine work in banking, but it will not necessary mean fewer bank jobs. Roles will be reinvented so that technology frees human staff to provide customers with excellent advice and service.
Weighing the possibility of adopting AI and automated decision-making is no longer a choice for banks; this technology has proved its worth in everything from combating fraud to meeting compliance requirements to providing excellent customer service via chatbots. As banks struggle to be profitable in the post-financial crisis era, AI has been an invaluable friend to those that have learned how to make it work for them.
Lately, there seems to be a frenzy well fed by consulting firms in the enterprise world about digitisation and the necessity to “digitise” companies’ business models and operations.
As the landscape of financial services continues to change, it’s critical to stay ahead of the game. ATMs were groundbreaking achievements once upon a time, while more recently, mobile baking was the logical next step in banking’s maturation.
Combating money laundering is no longer a choice but a must for banks. But the effort that must go into fighting it is daunting. How can technology, especially artificial intelligence and machine learning, battle the costs and drains on monetary and human resources required for AML compliance, making the whole process a lot easier and more effective? Can AI be trusted to do the job right?
Rarely has a technology been met with the excitement and trepidation that AI has. Because artificial intelligence not only matches but can surpass human intelligence, it is exciting as a means to improve speed, save cost and maximize accuracy—but menacing for its potential to displace human workers. Banks are embracing AI for its staggering benefits, while also acknowledging that it creates a few wrinkles that need ironing out.
Banks are spending $20 billion on compliance in an effort to combat money laundering, yet only one per cent of illicit financial flows are seized by authorities every year. While regulations have been introduced to crack-down on money laundering, so far they have had a limited effect.
How can banks and financial institutions get through to the generation born in the 1980s and 1990s, the so-called “millennials”, also known as Generation Y, given their shorter attention spans and distrust of brand loyalty?