The Impact of Generative AI on Financial Services: Insights from Mastercard’s Head of Digital Labs
The Rise of Generative AI in Financial Services: A Conversation with Fabrizio Burlando
Over the last decade, we have witnessed the introduction of advanced technologies from big tech firms that have often fallen short of expectations. However, the emergence of generative AI (GenAI) in recent years has been a game-changer, with the potential to add trillions of dollars annually to the global economy. In a recent report by McKinsey, the staying power of GenAI was highlighted, showcasing its impact on various industries, including finance.
According to the OECD, GenAI is being utilized in finance applications to improve risk assessment, fraud detection, and customer service. This disruptive technology is reshaping traditional financial institutions and becoming an essential part of the BFSI industry.
Fabrizio Burlando, Head of Digital Labs at Mastercard, recently discussed the current wave of generative AI tools and their impact on the financial services sector on the ‘AI in Business’ podcast. In their conversation, two key insights were highlighted:
1. Data Protection Techniques and Principles for Responsible AI Governance:
Fabrizio emphasized the importance of responsible AI governance to address concerns about security, privacy, and transparency. He stressed the need for ethical AI applications and highlighted the principles of ownership, control, benefit, and protection when it comes to customer data. By implementing advanced tools like Truata for data safeguarding, companies can ensure the responsible use of data in financial systems.
2. AI-Supported Decision-Making for Fraud Prevention:
Fabrizio discussed the significance of understanding specific problems that AI can solve in the financial sector. He highlighted the role of AI in decision-making support, particularly in fraud prevention and anti-money laundering. By leveraging AI models for constant recalibration and self-learning, companies can enhance their fraud detection capabilities and improve revenue forecasts.
Fabrizio also touched upon the three key areas where AI plays a significant role in financial services organizations: automating repetitive tasks, supporting decision-making, and hyper-personalization. He emphasized the importance of choosing between traditional AI and generative AI based on the specific requirements of the use case, highlighting the potential of GenAI in disrupting creative industries.
In conclusion, the rise of generative AI in financial services is revolutionizing the way companies operate and interact with customers. By adopting responsible AI governance practices and leveraging AI tools for fraud prevention and decision-making support, financial institutions can stay ahead of the curve and drive innovation in the industry. Fabrizio Burlando’s insights shed light on the transformative power of GenAI and its potential to shape the future of finance.
