According to an IDC report, banks across the world will spend about an additional US $31 billion by 2025 on artificial intelligence (AI) installed in existing systems to reduce fraud.
The report also mentions fraud management as a foremost priority for banking executives.
According to Michael Araneta, Associate Vice President, IDC Financial Insights, businesses might be overestimating the adequacy of their current defense mechanisms against fraud in coming up with digital products and services.
Araneta added that what worked well before would not be enough now in the more digitized business world. There must be a constant upgrade of fraud management strategies.
According to the report, the banking industry is facing two crisis scenarios, each side requiring solutions that can run counter to each other. Both government policy and financial services institutions must balance between the chase for revenue and risk management.
The industry will also be involved in platform-building by 2023, which allows financial services to be extended and externalized to third parties, said the report.
Araneta said that the industry is pursuing new collaborations like banking as a service (BaaS) and digital lifestyle ecosystems. He added that being digital-first means being attuned to the critical moment in the recovery of financial services.