Creating future-fit industries with AI
Md Yousup Faruqu
| Published: March 04, 2024 21:13:28
In the past, AI has been mostly known to be the stimulation of human intelligence that allows a computer program to learn, solve problems and engage with its surrounding environment. Today’s AI technologies usher in a new era of living. Under these circumstances, what is AI, if not a massive network of data slowly encompassing all corners of human societies? AI solutions such as virtual assistants, AI art and music generators and facial recognition systems are some of the tools that are driving innovation in technology for the near future.
Gradually, AI is penetrating every industry with the promise of offering numerous optimization solutions. The BFSI industry (banking, financial services and insurance) is also quickly becoming a hub for digital innovation. AI software solutions are making significant headway in the BFSI industry and helping organizations to become increasingly data-driven. Incorporating AI into Bangladesh’s BFSI industry is not only possible but imperative. How can the country gain from AI in banking, financial services and insurance sectors?
Leveraging generative AI for secured and protected BFSI industry: One of the most groundbreaking technologies making waves in the BFSI industry is Generative AI (GenAI). GenAI is the subdivision of AI that focuses on producing unique content rather than relying solely on pre-existing data. GenAI takes insights from previous data and improves to produce new text, images, and more, using scenario simulations, predictive analysis, and analyzing future trends while exploring risks and opportunities. GenAI evolves following a sophisticated language processing model and has the capacity to usher in a new dawn in banking and finance, healthcare, retail, pharmaceuticals, and beyond. A recent McKinsey research found that generative AI could contribute between USD 2.6 trillion and USD 4.4 trillion annually to the global economy. Adding to that, their forecast includes that “Key business functions such as marketing and sales, customer operations, software engineering, and research and development are predicted to account for 75 per cent of the total value GenAI can deliver.” GenAI is poised to bring a shift in business by transforming the way of operations and unleashing the level of creativity and innovation. This enhanced creativity and innovation have significant opportunity for the BFSI sector in enhancing customer experiences and revolutionizing decision-making while playing a significant role in fraud detection.
Globally, banks, financial institutions, and insurance companies have been increasingly investing in AI, leading to improved fraud detection, compliance, and cyber security. Bangladesh’s banking and finance sector is not far from embracing AI to strengthen its multi-faceted capacity, including but not limited to bolstering cybersecurity efforts, improving the credit rating system, and accelerating financial inclusion. It is noteworthy that Azure OpenAI Service is helping businesses worldwide transform their operations and drive growth in many ways. Utilizing GenAI’s ability to learn and adapt to new things, we can conveniently strengthen the BFSI industry’s ability to defend against many attacks.
Adoption of AI can foster productivity and efficiency: Productivity and efficiency are two terms that have been strongly linked with AI since its inception. There is nearly no major industry that modern AI has not already affected. As per a report by Allied Market Research the global artificial intelligence in the BFSI market was valued at USD 22.5 billion in 2022 and is projected to reach USD 368.6 billion by 2032, growing at a CAGR of 32.5 per cent from 2023 to 2032. The banking sector is expected to become one of the major gainers here as this sector looks up to an annual potential of USD 200 billion to USD 340 billion (equivalent to 9 to 15 per cent of operating profits), largely from increased productivity. Generative AI has also been embraced by Wall Street and investment companies for a gamut of good reasons. It is promising for Bangladesh’s BFSI sector as it has started embracing AI technology, albeit on a small scale.
The AI network is branching out throughout numerous mediums and is rapidly changing our lives with innovations that are accelerating at a blazing-fast pace. Now, it has also entered the BFSI industry. Modern customers want ease, wide-ranging financial solutions, and great value in financial products and services. Intelligent banks, financial services, and AI-integrated insurance solutions can significantly improve security and customer experience and accelerate industry innovation. However, to ensure this, the priority of the BFSI industry shall be managing risk, building trust, and enhancing customer experience as they significantly involve a sensitive subject — money. AI is a growing technology; thus, it is not only about leveraging this technology but also overcoming anxiety through building trust and focusing on responsible and ethical use.
Therefore, let us continue using AI technologies to build industries that are ready for the future.
The writer is country MD of Microsoft Bangladesh, Bhutan and Nepal
