Kathy Gibson is at IDC CIO Summit in Zimbali – Among the earliest gains from artificial intelligence (AI) has been in the field of fraud detection.

Banks have been compelled to reconsider the way they do business, says Lawrence Muravha, head: financial crime at African bank.

New technologies have driven the reimagining of the business model, he adds. “For any business, you need to look at your business strategy to ensure there is proper alignment to achieve what you need to achieve as a business.

“In the hurly-burly of everyday operations, it’s easy to lose sight of this,” he adds.

AI with integrity is African Bank’s stated strategy when it comes to risk and crime. “If you don’t have the correct data that you are analysing, you are lost.”

In the financial crimes section, AI tools are used to analyse customers in non-biometric ways.

“In the branches the risks are huge, so the controls have to be at the same level,” says Muravha.

Understanding and classifying data is vital here, he adds.

“At this point of time, a lot of data is being reduced – you want simplicity. But some of the elements you might forget when onboarding a customer is information you require for analytics and risk. If you don’t have it, it’s difficult to drive your risk management.”

This all means that banks have to readjust the way they do things.

The recent FIC Amendment Act, which came into force on 2 April, changes the way banks do business from a rule-based perspective to a risk-based perspective.

“So you have to put tools in place that allow you to understand the customer from the point of view of anticipated activities,” Muravha says.

From a financial crime perspective, it is important to understand customers when they are onboarded and that risk management programmes allow for the right decisions to be made.

“It is important that the board buys into what you are doing, so ensure that they understand your strategy and how you are managing risk.”

Applying advanced analytics helps the bank to start learning from experience and reduces the number of false positives that come up. “It is important to identify complex patterns and reduce the quantity of what we are reporting.

“In financial crime, we say we are dealing with intelligence rather than just information.”

Muravha points out that there have been huge moves in biometrics that integrate intelligently with various systems to assign a risk level to the customer before he even performs his first transaction.

Regulation and the requirement to mitigate risk is huge in the financial sector, says Mark Walker, vice-president: sub-Saharan Africa at IDC. “AI has a big role to play in these areas,” Walker says.