Latest news: AI in banking

Tifin, the artificial intelligence (AI) platform for wealth, has launched Tifin.AI. According to the fintech, Tifin.AI is dedicated to conceiving and developing Tifin’s second cohort of AI-powered fintech companies. In addition, JP Morgan has joined Tifin in funding the new A-focused venture. 

The formation of Tifin.AI aims to build upon the success of Tifin Studios. This created five companies between 2018 and 2021. The first iteration of Studios yielded profitable launches and exits. Examples include JP Morgan’s acquisition of 55ip in 2020 and the spin-off of Paralel Technologies. Other examples include the foundation of Tifin’s three subsidiaries Magnifi, Tifin Wealth, and Tifin AMP.  Launched in late 2022, Tifin AMP raised $10m in a Series A funding round in June. 

A new phase of fintech innovation in wealth management 

Tifin forecasts an expansion in the use of AI across both financial advice and products. Expanded use cases for AI will incorporate client portfolio insights for advisers, alternative investing, wealth management in the workplace, and insurance. 

Tifin says that it has refined a template for repeatable innovation. Specifically, it is one that bolsters efficiency and leads to shorter time-to-market for forthcoming innovations. Operating as a subsidiary within Tifin. The new venture will be directly overseen by its founder and CEO, Vinay Nair. 

“At Tifin it is our mission to deliver impact through innovation at speed,” said Nair. “The Studios model is deeply ingrained in our DNA. We are proud to have built a platform to help accelerate the future.” 

Tifin and JP Morgan share a common vision that AI is set to become an integral component of every wealth and asset management interaction. By leveraging the power of AI, many more professionals and individuals can now harness valuable insights and recommendations. This will, in turn, empower them to make informed financial decisions. 

“JP Morgan and Tifin’s collaboration underscores our shared commitment to innovation. And a shared belief that AI will not only reshape the financial services landscape, but accelerate the next era of innovation and efficiency,” added Ted Dimig, Global Head of Wealth Management Advisory Solutions, JP Morgan. 

Nikhil Rathi, head of the Financial Conduct Authority (FCA), has warned finance companies that artificial intelligence (AI) could disrupt the financial services sector in ‘ways at a scale not seen before.’ 

The warning came as UK Prime Minister Rishi Sunak is seeking to make the UK a centre for the regulation of AI. Rathi said, “Cyber fraud, cyber-attacks and identity fraud [are] increasing in scale, sophistication and effectiveness” as AI becomes more widespread. 

This will pose significant concerns for financial firms in particular. The head of FCA warned senior managers at those firms that they will be “ultimately accountable for the activities of the firm”, including decisions taken by AI. 

“As AI is further adopted, the investment in fraud prevention and operational and cyber resilience will have to accelerate simultaneously”, Rathi noted. “We will take a robust line on this – full support for beneficial innovation alongside proportionate protections.” 

Fighting AI fraud 

The AI fraud detection sector has been making strides in the banking sector for years, with RBI reporting several institutions – such as FICO – implementing AI in their services as far back as 2018. 

The AI market is set to expand significantly in the following years. According to GlobalData’s “Thematic Intelligence: Artificial Intelligence” report, investments in AI will hit $909bn by 2030 – up from $81bn in 2022. This marks a CAGR of 35% forecasted between 2022 and 2030. 

As far as cybersecurity revenues are concerned, GlobalData analysts expect them to reach $344bn worldwide by 2030. 

Derek Mackenzie, CEO at Investigo, a global skills provider, said: “With AI set to have a seismic impact on the financial services industry, tackling the digital skills shortfall should be a top priority. 

“From compliance to coding, businesses operating in this area are crying out for the latest tech talent to help them explore and implement AI into the workplace, yet many remain woefully understaffed”, Mackenzie added. “The FCA is right to get ahead of the game on this important issue, but without the right talent pipeline in place, far too many firms will find themselves falling behind in terms of AI capabilities and open to risk due to a lack of in-house regulatory expertise.”

Checkout.com’s solution – called Identity Verification – uses proprietary AI and is trained on billions of identity and facial recognition documents. The solution verified over 10 million identities during beta testing and uncovered over one million fraudulent identities. 

As a result, major companies have shown interest in the solution, with Uber Eats now using it to streamline driver onboarding processes.  

Uber Eats Senior Operations Manager Baptiste Foulon said: “We’re delighted to be working with the Checkout.com Identity Verification teams to take full advantage of their expertise so that we can guarantee the authenticity of every document provided and the best delivery experience for all independent delivery drivers using the Uber Eats app. 

The product launch comes after, in June, the company introduced another AI tool to help merchants boost acceptance rates and lower transaction fees. 

“The Checkout.com Identity Verification experience performed better than our usual process for converting our prospects into customers. Their promise looked great on paper and lived up to it in practice”, said Ophélie Robin, director of Digital Innovation at Crédit Agricole Consumer Finance. 

ID verification and fraud 

ID verification is becoming a soaring issue for banks and financial institutions following the rise in identity fraud cases using deep fakes and deceptive documents. In a recent comment piece published on RBI, Gemma Straite, director of Threat Analytics (EMEA) at BioCatch, said financial institutions “need to map out the fraud landscape to understand what and where resources need to be allocated, and then address the issues in real-time.” 

“We deeply believe in the intersection between digital payments and online identity verification”, said Meron Colbeci, Chief Product Officer at Checkout.com. “Legacy systems requiring an appointment with a human being or limited to certain days a week are not conducive to the long-term growth of the digital economy.” 

“By utilising AI and algorithms trained on billions of data points alongside a video stream that simply requires an internet connection, we can now verify identity documents to facilitate customer onboarding and comply with KYC requirements quickly and accurately”, Colbeci concluded.