Harnessing the power of AI to supercharge African banking

Commercial banking could be redefined by as much as 49% by 2030, wealth management to the tune of 42%, and investment banking by as much as 33%, according to the report. “Despite its promise of enhanced security, AI raises valid fears about data privacy and cybersecurity. Open banking frameworks and data-sharing mandates could expose financial information to risks of misuse. Additionally, cyberattacks targeting AI-driven platforms could have systemic implications,” said Parijat Sinha, head of open banking at FIS. One relatively new AI job title in banking is “prompt engineer” — a person who creates text-based prompts or cues that can be interpreted and understood by large language models and generative AI tools.

“AI adoption faces significant hurdles, including ensuring data privacy and trans- parency while adhering to protection laws,” he remarked.

Almost half of the work banks do could be ‘redefined’ by 2030. Here’s a breakdown.

AI could also support more refined risk assessments and personalized payment solutions, such as obtaining a personal loan at the point of sale, which aligns with evolving consumer expectations. The conference also highlighted the benefits of and need for a broader adoption of real-time and instant-payment settlement mechanisms. Instant payments enhance user experiences in both consumer and commercial contexts, such as minimizing delays in accessing money and enabling rapid delivery of goods or services.

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Take a look at what’s already transforming, what will be adapted by 2030, and the parts of the job that may stay mostly in the hands of humans for now. Banks around the world are actively leveraging AI to enhance customer-facing chatbots, prevent fraud, and streamline processes like regulatory reporting and software development workflows. According to McKinsey, up to 80% of IT budgets in banks are allocated to maintaining outdated systems, rather than investing in innovations to stay competitive amid growing AI adoption. DKB already has a digital agent in use today and is also using generative AI to accelerate document-based customer processes (DocAI). The AI support based on OpenAI technology was introduced in April 2024 as the first point of contact on the help page and for basic customer inquiries.

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The chat-based assistant can be used without logging in and provides information on common questions such as daily allowance rates or password resets, but has so far been limited to general information and cannot process individual consultations or complex inquiries. One of the hallmarks of artificial intelligence and machine learning is that the algorithms build on themselves, advancing their abilities along the way. Over time the advances have the potential to exceed the abilities of their human programmers, creating a troubling lack of transparency. AI has the potential to help banks manage risk by providing more accurate predictions and insights. Machine learning algorithms can analyze historical data to identify patterns and trends that may indicate potential risks. This can help banks make better-informed decisions and reduce the likelihood of losses.

“A step- by-step strategy for progressive banking modernisation is critical, beginning with user interfaces and gradually extending to backend systems,” Pleiter explained. Speaking at the event, Jouk Pleiter, Founder & CEO of Backbase, argued that allocating resources to integrate AI could be the key differentiator between banks that succeed with customers and those that do not. The open-banking discussions at Money20/20 reflected open banking’s growing foothold in the United States. We will be interested to see how industry participants strike the right balance as they navigate the evolving open-banking regulatory landscape. The impact of AI is profound, with automation and fraud protection being the most popular.

• Innovators at the conference were zealous about taking both consumer and commercial payment experience to the next level.
• One relatively new AI job title in banking is “prompt engineer” — a person who creates text-based prompts or cues that can be interpreted and understood by large language models and generative AI tools.
• While AI offers several benefits, it also comes with challenges — with security being a major concern.
• With AI tools, you no longer have to rely on traditional banking hours for support or transactions.

Haihambo also underscored the dif-ficulties women encounter in accessing networking platforms. “Men tend to have access to different networking platforms to raise funding, or access to investors at a higher level,” she added. To ensure a smooth transition to the modernisation, it is essential to adopt a phased approach to AI integration.

• Artificial intelligence is on track to redefine 44% of the work done at banks by 2030, according to ThoughtLinks, an independent consulting firm.
• Meanwhile, banks and credit unions are investing in and offering digital wallets directly.
• Women need to be part of the innovation process and, crucially, the tech-powered solutions that banks come up with need to help women entrepreneurs to access financial products at more com- petitive rates.
• “I’m highly confident it’s going to change the way we work, but I think it’s going to create different types of work,” said Mike Abbott, global banking lead at Accenture, in an interview.

What is expected to be redefined by 2030:

Chopra’s address provided the audience with some clarity on the objectives and expectations of the CFPB’s new open-banking rule. Chopra’s remarks reaffirmed the CFPB’s goals of fostering competition across the banking industry and protecting consumer rights without sacrificing consumer privacy or data security. He stressed open banking’s role in helping break down a monopoly over customers’ financial information and empowering consumers to take control of their own financial data. The move toward open banking in the United States is expected to spur innovation in the financial services industry by allowing smaller banks, fintechs, and other companies to develop innovative financial solutions tailored to consumers’ needs and data. Chopra acknowledged and emphasized that such access must be implemented with stringent data privacy standards to prevent misuse and maintain consumer trust.

Discussing the transformative impact of major fintech innovations on the bank- ing sector, Dasgupta identified several key trends. Creating a seamless and frictionless payment experience through digital wallets and embedded finance was a much-discussed topic. Meanwhile, banks and credit unions are investing in and offering digital wallets directly. The emergence of a digital wallet integrated with financial institutions could bring more market competition in the digital payment space, because traditional financial institutions likely find it easier to establish trust and credibility with customers. Like other fintech applications, payment innovation is not immune to the use of AI. The enhanced fraud detection and prevention brought by AI could be particularly relevant to the payments industry because it tends to reduce banks’ and merchants’ fraud losses and deter customer identity theft.

The cooperation is primarily intended to provide greater convenience for customers and help the bank to automate its work processes and sell its products more effectively. The press release mentions the further development of the digital agent for personalized banking, AI-supported cross-selling and the automation of application processes. In June, Citigroup published a research report that predicted artificial intelligence will displace 54% of jobs in the banking industry (based on research from Accenture and the World Economic Forum), more than in any other sector. A Bloomberg Intelligence report released Thursday found that global banks are expected to cut as many as 200,000 jobs in the next three to five years as AI takes on more tasks. The increased reliance on artificial intelligence has pros and cons for the banking sector, and more widely to their customers. While widespread adoption of AI and machine learning throughout the finance sector may still be years away.

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Artificial intelligence can potentially automate many of the routine tasks that bank employees perform. This can also free up employees to focus on higher-level tasks that require human expertise. Sepo Haihambo, CEO, Commercial Banking at FNB Namibia, described the ongoing struggles women-led fintechs face in accessing finance compared to their male counterparts. “Another chal- lenge that women face in the fintech and financial services sector is access to capi- tal. “AI integrations could transform the banking industry for a better client experience and we have already begun to see this flourish.

Deutsche Kreditbank wants to take a pioneering position in AI banking thanks to a cooperation with OpenAI. While AI offers several benefits, it also comes with challenges — with security being a major concern. In commercial lending, generative AI can gather needed documents, extract the right information and put it in the required format.