1/13/2024 0 Comments Send sms message with skype![]() But after 2023’s layoffs, remaining staff will be spread too thin to enact the necessary oversight to deploy AI ethically and at scale. They’re hoping that using AI to crunch through claims quickly will offset the last few years of poor business results. Right now, insurers are rolling out autonomous systems at breakneck speed, with no tailoring to their business models. “In 2024, one of the top 100 global insurers will go out of business as a consequence of deploying generative AI too quickly. – Joan McGowan, Global Banking Industry Advisor, SAS Deliberate AI deployment makes or breaks insurers These are alarming figures! Augmenting current AML systems with machine learning and network analytics would improve transaction monitoring dramatically by reducing false-negative and false-positive rates and sending higher-quality alerts downstream to AML investigators and compliance groups.” Only 1% of the criminal proceeds are confiscated, and 95% of alerts are false positives. As much as $2 trillion is laundered worldwide annually, according to the United Nations. ![]() “AI will be a game changer for anti-money laundering programs, as the global cost of compliance reaches $274 billion, 60% of which is labor. – Troy Haines, Senior Vice President of Risk Research and Quantitative Solutions, SAS AI transforms financial crimes compliance Beyond the gains they realize in dynamic premium pricing and risk assessment, AI will help them automate and enhance claims processing, fraud detection, customer service and more.” To survive this crisis, insurers will increasingly adopt AI to tap the potential of their immense data stores to shore up liquidity and be competitive. US insurers, for example, are under scrutiny for raising premiums and withdrawing from hard-hit states like California and Florida, leaving tens of millions of consumers in the lurch. ![]() Global insured losses from natural disasters surpassed $130 billion in 2022, and insurers worldwide are feeling the squeeze. “After decades of anticipation, climate change has transformed from speculative menace to genuine threat. – Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions, SAS Insurers confront climate risk, aided by AI ![]() We are entering the Dark Age of Fraud, where banks and credit unions will scramble to make up for lost time in AI adoption – incentivized, no doubt, by regulatory shifts forcing financial firms to assume greater liability for soaring APP scams and other frauds.” A crook can clone a voice with $5 and a few seconds of audio using simple online tools. Imitation websites look stunningly legitimate. “Even as consumers signal increased fraud vigilance, generative AI and deepfake technology are helping fraudsters hone their multitrillion-dollar craft. – Donald van Deventer, Managing Director of Risk Research and Quantitative Solutions, SAS GenAI-induced ‘Dark Age of Fraud’ propels anti-fraud advances Yet less than a third said their firms have fully automated data sharing between ALM and other risk or business functions. A recent survey of risk professionals revealed that 80% of firms are eyeing significant improvements to their asset liability management functions. “2024 will bring more bank failures, forcing banks to recognize the most important question in risk management: ‘What is our own probability of default?’ And they will deploy tools and technologies to answer that existential question. Bank failures spur a risk management reckoning How will banks, insurers and other financial firms balance the risks and rewards of GenAI and other transformative tech in the year ahead? Experts from AI and analytics leader SAS foresee a mix of successes and failures as the industry sprints to meet consumer and stakeholder expectations. As in other industries, the explosion of generative AI has forced the financial services sector to quickly adapt while riding a wave of regulatory and ethical questions.
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