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Kenya’s financial sector is rapidly adopting AI to enhance service delivery, security, and efficiency. Banks and fintechs use AI for fraud detection, chatbots, and risk assessment. MGA Group can leverage AI for operational gains and customer insights while investing in infrastructure, skills, and compliance.
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Kenya's fintech and banking sectors have become two of the most robust areas of the national economy. Kenyan commercial banks and fintech companies have been digitizing their processes and investing more in AI technologies to guarantee round-the-clock service, better customer interactions, improve customer information security and lower overhead costs associated with human labor. Financial chatbots are used by all Kenyan commercial banks and fintech businesses to engage with their customers, communicate with existing ones, bring on new clients and facilitate online transactions. Therefore, there is no question that key players in Kenya's banking and fintech sectors have embraced the use of financial artificial intelligence technology to further open up the market and boost efficiency. The use of artificial intelligence in Kenya's financial services will be covered in full in this report.
Artificial intelligence is revolutionizing global economic sectors, becoming increasingly crucial in the twenty-first century as human and consumer requirements evolve.
A major shift in Africa's use of AI is being seen in Kenya, where banks and fintech companies are using AI to enhance service delivery and security, making financial services more effective, individualized and secure .
An analysis of the adoption of AI in the banking & fintech sectors may be found below:
a) Fraud Identification and Avoidance: AI-driven systems can detect fraud in real-time by analyzing transaction data. Biometric authentication techniques like fingerprint scanning and facial recognition provide additional protection for online and mobile banking transactions. This proactive approach helps avoid financial losses for both customers and institutions.
b) Customer support and automated customer care: AI-powered chatbots are being used by banks and fintech companies for round-the-clock customer service, freeing up human workers to deal with more complicated questions. Additionally, these chatbots provide tailored suggestions, which raises client engagement and happiness. These automated solutions are being implemented by Kenyan banks such as KCB.
c) Cybersecurity Measures: Banks are utilizing AI-driven solutions to enhance their cybersecurity, enabling swift response to complex cyber threats by monitoring network traffic for anomalous activity and potential breaches.
d) Streamlined Operations: AI-powered automation solutions automate repetitive tasks, optimize processes and simplify lending procedures. They identify inefficiencies and reduce costs by optimizing workflows. Digital lenders use AI to analyze consumer behavior, expedite application processes and offer competitive rates based on borrower repayment likelihood, transforming the lending environment.
e) Risk assessment and credit scoring: AI systems can assess creditworthiness for underprivileged groups using non-traditional data sources like social media and mobile phone usage trends. This improves risk management skills, enabling banks to make informed decisions and reduce losses, particularly for online lenders serving non-traditional clients.
Examples of AI chatbots in the finance industry in Kenya:
+ In order to facilitate consumers' access to insurance services, ICEA Lion introduced "Leo," a chatbot that is integrated with messaging apps such as Telegram and WhatsApp.
+ Equity Bank launched "EazzyBanking," which enables consumers to conduct financial transactions using WhatsApp.
+ Safaricom introduced "Zuri" a service that helps users with M-PESA transactions and other services.
MGA Group may establish itself as a pioneer in applying AI for risk mitigation and operational excellence by concentrating on the areas listed below:
– By examining the betting and gaming patterns of both domestic and international gamblers, artificial intelligence (AI) may improve MGA Group's operational effectiveness and customer satisfaction while also enhancing services and marketing tactics. It will, in part, enable the business to make data-driven decisions more quickly.
– MGA Group may consider collaborating with financial institutions to offer educational resources and training in AI technology in an attempt to foster innovation and strengthen ties within the financial ecosystem.
1) Infrastructure development: In order to protect sensitive data, AI applications need a strong IT infrastructure with scalable storage, strong networking and high computing power. They also need efficient data management solutions.
2) Development of the Workforce: Skilled AI personnel are needed in the financial sector, and training programs and partnerships between companies and academic institutions are essential for long-term success.
3) When incorporating privacy-preserving features into AI systems, organizations must abide by data protection laws such as the Kenya Data Protection Act and the GDPR.
Applications of AI in Banking and Finance . https://www.liquidity.com/resource-funding/how-ai-in-banking-is-shaping-the-industry
Bhatti, A. A. (2019). Exploring the adoption of Artificial Intelligence in the Finance Industry: The case of Chatbots in the Kenyan Finance Industry. SSRN Electronic Journal . https://doi.org/10.2139/ssrn.3493340
Digital lenders deploy AI in race for customers. (2024). Nation Africa . https://nation.africa/kenya/business/digital-lenders-deploy-ai-in-race-for-customers-4710326
The Transformative Impact of AI and Fintech on the Banking Industry . (2024, June 3). Fintech Association of Kenya. https://fintechassociation.africa/blog/the-transformative-impact-of-ai-and-fintech-on-the-banking-industry
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