Financial institutions across Southeast Asia are increasingly recognizing the transformative potential of generative artificial intelligence (genAI). A recent research by Kapronasia, in collaboration with Tenity and KBFG, reveals that the adoption of genAI in the sector is growing, with leading banks activity implementing solutions to boost productivity, enhance customer experience, and improve credit approving.
The report looks at the state of genAI adoption in Southeast Asia’s financial services sector, drawing on primary and secondary research, including discussions with industry experts from financial institutions as well as technology providers.
The research reveals a region-wide shift towards embracing genAI to enhance customer experience, improve productivity and elevate operational efficiency.
Boosting productivity
The report highlights productivity and collaboration as major areas where genAI is making a significant impact. By automating routine tasks, improving the data analysis process, and facilitating team communication and sharing, genAI has the potential to enhance efficiency across organizations.
Microsoft 365 Copilot is one example of a genAI productivity tool. It combines the capabilities of large language models with user data from emails, documents, and chats to streamline work processes and enhance accessibility to information.
In Singapore, UOB participated in the Microsoft 365 Copilot Early Access Program (EAP), which gave access to the genAI-powered productivity tool to approximately 300 employees spanning various roles in both frontline and back-end functions. Staff in functions such as branches, customer service and technology and operations were able to use Microsoft 365 Copilot to improve productivity, accessibility, and collaboration in a secured manner.
Similarly, Security Bank in the Philippines was another participant in the Microsoft 365 Copilot EAP. The bank rolled out Copilot with 300 users leveraging tools including Microsoft 365, Azure Virtual Desktop, Power Platform, and more.
Improving customer service
Chatbots are another popular application of genAI. While these tools have been used in customer service for quite some time, they are now being transformed by genAI.
One notable example is Great Eastern Life, an insurance provider which operates a genAI-powered chatbot called Gerica. This chatbot assists agents and customers in checking claim statuses and policy details, significantly improving engagement and reducing errors.
In the Philippines, digital bank Tonik has incorporated ChatGPT into its operations to enhance service quality while managing operational costs effectively. The technology now handles 90% of customer queries and is capable of resolving 75% of these without human intervention.
In Singapore, DBS has developed the CSO Assistant, a virtual asset designed to assist the bank’s 500-strong customer service officer (CSO) workforce in handling queries from consumer and corporate customers more efficiently and effectively. Pilots for the CSO Assistant began in October 2023 and data collected during the trial showed that the chatbot had a transcription and solutions accuracy of nearly 100%.
Singapore’s OCBC is another pioneer in this space, unveiling in October 2023 its OCBC GPT, a chatbot powered by ChatGPT’s large language model (LLM) and developed in collaboration with OpenAI to boost productivity and better serve customers. The tool is designed to assist the bank’s 30,000 employees globally in writing investment research reports, translating content in multiple languages, and drafting customer responses.
Credit scoring and loan approvals
In Southeast Asia, genAI is also addressing longstanding challenges in credit scoring, including biases, discrimination and a lack of historical data. By synthesizing vast datasets from diverse sources, genAI provides a more inclusive and accurate assessment of creditworthiness, especially for gig economy workers and individuals with non-traditional employment.
Singapore-based FinbotsAI exemplifies how GenAI is transforming credit scoring. The startup has developed CreditX, an AI-powered platform that helps clients more accurately assess applicants’ creditworthiness for a wide variety of lending use cases, including small and medium-sized enterprise (SME) loans, credit cards, and personal and home loans.
CreditX has been adopted by leading banks in Southeast Asia, such as Sathapana Bank in Cambodia and KBZ Bank in Myanmar, as well as digital lending fintech startups, enabling these providers to build high-accuracy credit scoring models on demand and efficiently manage loan portfolios.
Across corporate finance, the use of AI is rapidly expanding. KPMG’s recent global AI in finance study found that 71% of the 2,900 companies polled in April 2024 were rolling out AI across wider areas of finance, including accounting, financial planning, treasury management, risk management and tax management.
On average, the companies surveyed were spending about 8.5% of their IT budgets on AI technologies and solutions. That percentage is expected to jump to 13.5% over the next three years.
Featured image credit: edited from freepik
