112 FEATURE Intelligent banking The concept of ‘intelligent banking’ involves institutions becoming data-driven and then using the value of that data to deliver better services to clients. For example, data can be used to evaluate the customer life cycle, identify spending trends and provide personalised customer experiences such as monitoring spending patterns and making financial suggestions. Microsoft Cloud for Financial Services, which includes Copilot capabilities in Microsoft 365 and Dynamics 365, uses artificial intelligence and machine learning to process large volumes of data. This enables users to deliver personalised experiences to customers and empowers their employees to better serve clients. “Cloud infrastructure can be accessed from anywhere at any time,” says Hazou. “There is a tremendous amount of value-added capabilities and tools available in the cloud, including its agility and security that takes core banking processes to the next level.” However, Hazou argues that it’s not so much about the tools themselves but more about what those tools enable in terms of modernising the financial services industry. “The cloud enables banks to empower clients by allowing them to understand their own spending patterns,” he says. “Through a variety of tools, clients can see what’s going on in their businesses or in their lives in real time.” Banks with cloud technologies are also better able to assess risk by using historical and contextual data to calculate credit score and manage them as a portfolio. This improves the core banking function of providing loans by mitigating credit losses and hence, delivering more value for clients. “It’s really the clients that will benefit from this data in the long run,” adds Hazou. “It can help them understand their business, optimise working capital, reduce risk and provide better service to their own customers.” Cloud technology is also driving personalised customer service, with large language models acting as the basis for self-help chatbots. For example, accounting firm EY is using Microsoft Cloud and Azure OpenAI to develop a new intelligent payroll chatbot for its clients. This will ensure employees receive quick responses to their questions, regardless of barriers such as the language or the time zone they are in. Overcoming security breaches Whilst data analytics is enabling banks to provide more personalised services, it is also leading the fight against financial crime. AI and ML have revolutionised the ways in which financial services providers are combatting fraud and account takeovers. “A lot of bank cloud transformation strategies are centred around the use of AI and ML to combat financial crime and money laundering,” says Hazou. “These increasingly sophisticated threats necessitate the latest techniques and technologies across wide sets of data that only machines can accomplish in real time. “To understand the motivations of a financial criminal requires a lot of telemetry and connecting the dots in ways that are not so straightforward,” adds Hazou. “It’s something that cannot be done by people alone and requires sophisticated algorithms to understand aberrations in behaviour that can be assessed for potential criminal activity”. Microsoft partner BioCatch, for example, uses behavioural biometrics to understand an individual’s spending patterns and ultimately to prevent crime. The growth of core banking A 2021 study by Marketwide Research forecasted that cloud-based core banking markets will grow by 16.5 per cent between 2019 and 2024, and that the value of the global cloud-based core banking market will reach an approximate value of $13 million by 2026. As businesses invest in technologies like AI and blockchain, Hazou urges them to use intelligent solutions to improve their legacy functions, too. “Core banking needs to evolve the way the rest of the economy and financial services are evolving,” says Hazou. “They need to be able to accommodate to today’s world of data. Banks have been modernising a lot of their surrounding systems – they’ve certainly modernised customer experience a lot since data processing became available in the 1970s – but that leaves core banking as an area that still needs to be invested in.” “ Through a variety of tools, clients can see what’s going on in their businesses or in their lives in real time” Photo: iStock/Vitalii Gulenok
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