How US Businesses Can Gain Visibility and Control Through AI in Banking
David Duan, Data Science Stream Lead & Principal Data Scientist at Fraedom, discuess how banking can gain visibility and control through AI
In order to maintain adequate cashflow, gaining visibility and control of spending is vital for businesses. However, currently, this is something many US businesses, SMEs in particular, struggle with, as shown by the fact 82% of business failures are due to poor cash management. As banks begin to address this problem, we are seeing the adoption of more technologies that make use of artificial intelligence (AI) and machine learning (ML), with research from Fraedom finding that 40% of US banks plan to invest in these technologies in 2019. Consequently, US businesses could soon benefit from a wider range of capabilities and tools that give them greater visibility of and control over their accounts in the following ways:
Businesses will benefit from greater account protections thanks to the use of AI for fraud detection. AI will help businesses keep their accounts safe by detecting any anomalies in their accounts and fraudulent activities much quicker than previously possible. The beauty of using AI and machine learning (ML) in this way, lies in their ability to understand what is ‘normal’ for each account or card by recognising patterns based on past transactions and behaviours.
With AI capable of detecting any deviations from the normal patterns faster than currently possible, banks will be able to inform businesses if their accounts appear to have had unusual activity. Certainly, anomalous transactions aren’t always fraud, it just means that they’re out of the ordinary and need some more investigation and flagging them to the business will allow for this. Being able to identify anomalies faster could be significant for US businesses as it will allow them to pick up on any misuse of their accounts and deal with it immediately. In cases where fraud has occurred, businesses will be able to get to the root of the problem quickly, rather than finding out months down the line when the employee the transaction relates to may have moved on.
In the future, we may get to a point where fraud detection can be done in real-time in order to stop fraudulent transactions happening altogether. In these cases, we could see the account being frozen or the card being blocked in order to prevent the transaction from being completed. However, this is still some way off becoming a reality.
Control of spend
As banks get to grips with continuous machine learning, they will be able to accurately forecast how much credit businesses require and limits on spending will be set automatically. This will provide businesses with a better understanding of their spending and help to prevent them overspending. It will also allow for credit limit redistribution based on historic spending patterns. For example, if an employee within an organisation is consistently spending a certain amount, the bank will know that’s how much credit that should be allocated to them. This gives banks a mathematical way of understanding the optimal way to provide credit.
This means that credit will be allocated in an optimal way, ensuring the amount of credit employees are given reflects their spend history. This guarantees that those employees who often make large transactions are given the credit to do so, while those who use their company accounts for lower-cost transactions don’t receive as much, to ensure credit is being used to the greatest effect.
Banks can also use AI to create more personalised customer experiences and to ensure they offer their customers the products and services most likely to be of interest to or benefit them. In this respect, AI would recognise patterns in spending and use this to determine which loans or credit cards would be best for different business customers. AI will also be able to flag how the individual tends to interact with the banks, for example, whether they prefer to use online or telephone banking. This will then enable banks to use this information to personalise the way they communicate with customers, choosing the method that the individual is known to prefer and helping to streamline communications for businesses.
The use of AI and ML in banking will ultimately provide organisations with a greater level of control over their accounts, more streamlined processes and a better understanding of their finances. It will also offer improved visibility, helping to prevent instances of fraud and allow businesses to deal with suspected cases of fraud faster to come to a swifter resolution. As this is realised, employees will gradually spend less time manually interrogating accounts and instead being able to focus on more value-adding tasks.
For more information on business topics in the United States, please take a look at the latest edition of Business Chief USA.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.