Africa’s global bank, United Bank for Africa (UBA) Plc, has acknowledged that the trending user friendly artificial intelligence known as “AI Chatbots”, contributed immensely to the improvement of the financial institutions’ services to her customers.
UBA Executive Director, Nigerian North Bank, Emem Usoro, speaking in a recent interview, said while almost all the Nigerian banks have adopted the AI Chatbots, UBA’s financial boost can be credited to the introduction and use of AI and Nigeria’s economy boosted in turn.
Her statement reads;
“AI had had a significant impact on the banking industry, A1 is rapidly changing the quality of products and services the banking industry offers. Not only has it provided better methods to handle data and improve customer experience, but it has also simplified, sped up, and redefined traditional processes to make them more efficient. With the availability of technologies such as AI, data has become the most valuable asset in a financial services organization.
”Now more than ever, banks are aware of the innovative and cost-efficient solutions AI provides and understand that asset size, although important, will no longer be sufficient on its own to build a successful business. Consequently, banks are investing heavily in AI and predictive analytics to make better decisions and provide customised services to its customers.
”We are already seeing several areas in banking services that have been taking advantage of this disruptive technology. A1 is playing a significant role in customer services, support , fraud detection and prevention , risk assessment and credit scoring , data analytics and process automation within the banking industry.”
Speaking on how long UBA has been utilizing the disruptive technology, Usoro said;
“Our journey in A1 started six years ago, on January 11, 2018 with the launch of our conversational chatbot – Leo with a firm resolve to prioritise our customers as well as put the bank at the heart of disruptive technologies that will transform the experience of our esteemed customers.
“AI has had a significant impact on the banking industry, revolutionising various aspects of banking operations and customer experiences. Some key areas where AI is playing significant roles include customer service and support and A1 powered chatbot and virtual assistant (the leading example being UBA’s Leo). UBA took the lead in the conventional banking space with its chatbot Leo across various social media platforms, facebook, messengers, apple business chat, whatapp, Instagram and goggle biz chat across its 20 african subsidiaries and grew to more than three million customers in four languages ( English , French , Portuguese and Swahili). We have used A1 to evolve from a virtual assistant chat box to offering personalised banking services to our customers. A1 achievements include employee attrition prediction, customer churn prediction and account reactivation. AI-powered chatbots interacts with customers 24/7 and enhance online conversations. In addition to typical responses to customers’ questions to help them work through their account details, chatbots can now help in opening new accounts and directing complaints to appropriate customer service units amongst others.”
Speaking further on the challenges of the business and financial sector in the country and it’s solution, the Executive Director said;
“In my opinion, the biggest challenges ahead of the banking sector in Nigeria in the short to medium term include slow GDP growth. Available data and forecasts for key macroeconomic indicators in the Nigerian economy, suggest that the economy will continue on a moderate recovery path through 2023 as legacy headwinds linger. These include insecurity in food producing areas; high cost of energy and rising cost of debt servicing. Accordingly, the economy is forecast to grow in 2023 by 3.03% (CBN), 3.75% (FGN) and 3.29% (IMF).
According to the National Bureau of Statistics (NBS), Real Gross Domestic Product (GDP) grew by 2.31 per cent (year-on-year) in the first quarter of 2023, compared with 3.11 per cent in the corresponding quarter of 2022 and 3.52 per cent in the preceding quarter.
The economy moderated on its current recovery trajectory, posting positive, albeit lower growth, for the tenth consecutive quarter, in spite of a multitude of headwinds to its full recovery.
The significant growth performance was primarily propelled by the continuous expansion in the services and agricultural sectors, a steady upward trajectory in economic activities across various sub-sectors, and the ongoing comprehensive backing provided by the CBN in sectors that foster growth. Concurrently, there has been a rise in cybercrimes and cyberattacks, posing a growing concern.
Alarming patterns in financial fraud and cybercrimes have posed a threat to electronic payment transactions, currently valued at an average of N30.2 trillion each month. Research indicates that the increasing adoption of e-transactions by Nigerians is paralleled by a rise in cybercrimes, with cybercriminals becoming more skilled at accessing the bank accounts of unsuspecting users. The shortage of IT personnel (referred to as JAPA) within banks is hindering their swift response to cyber threats, and the compromise of bank accounts is anticipated to worsen as the festive season draws closer as the festive season approaches.
Already, the Nigerian Communications Commission (NCC) has issued 10 cyber alerts to warn Nigerians about the possible danger associated with or targeted at some platforms, including Cisco and lately telegram, which these cyber criminals exploit to cause havoc.
A January report by Financial Institutions Training Centre revealed that Nigerian bank customers lost a total of N2.72 billion to fraud in the first and second quarters of 2022. Between July and September 2020, banks, according to the Nigeria Inter-Bank Settlement System Plc, lost N3.5 billion to fraud-related incidents, representing a 534 per cent increase from the same period in 2019, when it was N552 million. In 2018, commercial banks in Nigeria lost a cumulative N15 billion ($32.36 million) to electronic fraud and cybercrime.
This was a 537 per cent increase on the N2.37 billion loss recorded in 2017. Nigeria’s Consumer Awareness and Financial Enlightenment Initiative had projected a $6 trillion loss by 2030 to cybercrime within and outside Nigeria.
Mostly carried out via phishing and identity theft, these offenses involve fraudulent activities. In September 2022, a three-day cyber-attack saw suspected fraudsters infiltrating a customer’s account within an old-generation bank. They managed to move a substantial sum of N523.337 million from the targeted account, distributing the funds across 18 distinct accounts within the same bank.
Some analysts have argued that the 2004 banking industry recapitalisation, which increased banks’ capital base from N2 billion to the current N25 billion, had weakened. Analysis shows that N25 billion in 2004 exchange rate, saw the banks’ capital base in dollar terms average $250 million.
Presently, when we correlate N25 billion at an exchange rate of N800, the resulting value is significantly reduced to approximately $31 million. Given that assessments are conducted based on foreign exchange rates, the perceived robustness of numerous organizations is likely to experience a slight decrease. If the ongoing exchange rate remains stable for an extended period, it is anticipated that banks, insurance firms, and other financial entities may embark on recapitalization efforts.
Recall that minimum capital requirement for commercial banks is N25 billion; the naira has depreciated five times since then, the apex bank- CBN may need to recapitalise banks to strengthen the banking industry and financial industry at large.
“These challenges require a synergy between fiscal and monetary authorities, while I will encourage all banks to enhance their risk management frameworks and risk scenario plays to enable them successfully mitigate any emerging risk or challenge.”
With over 20 years experience in the banking sector, Emem Usoro, has served in the various departments, spanning from customer service, retail, commercial, corporate banking and public sector, covering all the regions in the country.
Before now, she was the Directorate Head, Abuja and North Central Bank and was also the Regional Director, Lagos Island region in charge of 32 branches in the Apapa and Lagos Island region, where she was responsible for developing, planning and implementing strategies to grow and turn around ailing branches, amongst other activities. She has a strong track record of winning and executing high-powered transactions.