WHILE AI OFFERS SIGNIFICANT BENEFITS , IT IS ESSENTIAL TO ADDRESS THE RISKS ASSOCIATED WITH ITS USE .
INDUSTRY WATCH
WHILE AI OFFERS SIGNIFICANT BENEFITS , IT IS ESSENTIAL TO ADDRESS THE RISKS ASSOCIATED WITH ITS USE .
Africa ’ s financial sector is undergoing digital transformation , driven by advancements in Artificial Intelligence and mobile technology . Despite the notable progress in mobile banking and fintech , the continent continues to face a significant financial inclusion gap , with over half the population remaining unbanked .
This paradox is particularly evident in South Africa , where a sophisticated financial sector coexists with deep inequality . To bridge this divide , South African banks are leapfrogging legacy hurdles by embracing technologies like Generative AI , focusing on socioeconomic trends and using advanced tools to reshape customer interactions and underwriting processes .
Even though a high percentage of South Africans have access to formal financial products , a significant portion of the population remains effectively unbanked due to distrust of financial institutions , particularly within the informal sector . touchpoint . This not only improves customer satisfaction but also frees up human agents to handle more complex inquiries .
Furthermore , AI is revolutionising credit scoring , especially for underserved populations . By analysing alternative data sources like mobile phone usage and utility payment history , AI can assess creditworthiness for individuals who may not have a traditional credit score . This helps to expand financial inclusion by providing access to credit for those who were previously excluded .
While AI offers significant benefits , it is essential to address the risks associated with its use . Organisations must be cautious when partnering with cloud-enabled service providers . These providers should prioritise data privacy and security by adhering to strict regulations like General Data Protection Regulation and Protection of Personal Information Act .
Brighton Chidoma , Senior Client Success Executive , Infobip
To appeal to this market , the Banking , Financial Services , and Insurance , BFSI sector is pursuing digital strategies that build trust by offering more accessible financial solutions .
In leveraging conversational banking and prioritising customer experience , South African BFSI players can attract tech-savvy users while retaining traditional customers , driving greater financial inclusion across the country . By integrating AI , South Africa ’ s BFSI sector can enhance customer experiences and operational agility , driving financial inclusion and sustainable growth in the digital age .
Generative AI is playing a decisive role in transforming the BFSI sector in South Africa . Banks are now leveraging AI-powered chatbots to provide 24x7 customer support , answer frequently asked questions , and personalise customer interactions at every
They should also employ advanced encryption techniques to protect sensitive customer data . Transparency is key ; providers must inform customers about data usage and offer options for data control . By partnering with reputable providers who prioritise these factors , organisations can mitigate the risks associated with AI and ensure the ethical and responsible use of technology .
To serve diverse customer segments , South African banks are implementing tailored digital strategies . For affluent customers , banks offer personalised financial services through advanced digital platforms , including wealth management tools and investment advisory services .
For underserved populations , banks are focusing on accessible options like Unstructured Supplementary Service Data banking and micro-lending . By
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