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THE integration of artificial intelligence (AI) in financial technology (fintech) is said to be one of the critical components to combating fraudulent practices in Zimbabwe’s financial sector.
Around the globe, most financial crimes have been traced back to the banking sector.
Recently, the Economic and Financial Crimes Commission (EFCC) raised concerns about the banking sector increasingly becoming a cesspool of fraudulent activities.
In an interview on the sidelines of the Computer Society of Zimbabwe (CSZ) Winter School in Bulawayo on Friday, BancABC Zimbabwe Head of Technology Services, Mr George Chinomona said Zimbabwe’s financial sector needed to embed AI in their systems.
“One of the critical points of discussion during the winter school was issues on security and how to deal with fraudulent activities within the financial sector. These fraudulent activities include sim card swaps, money laundering transactions and card cloning, among others.
“There are quite a number of regulatory requirements that come from the regulator, the Reserve Bank of Zimbabwe (RBZ) and as the financial sector we need to deal with anti-money laundering issues and comply with a number of regulations with regards to security,” he said.
“There is a need to improve accuracy in analysing transactions as they happen on the go and this can be best done using AI. Using AI, you can manage transactions on real-time monitoring regardless of how many they are and if there are any fraudulent activities within these transactions you can detect where they are coming from.”
He said the use of AI was one of the ways to detect fraud, mitigate it and manage the process.
Mr Chinomona said there was a need to also reduce false positives, where transactions would have been incorrectly identified as fraudulent.
“Due to manual or semi-manual processes, you have a lot of false positives where transactions are said to be not clean transactions but after all, they will be rather clean ones. A lot of effort and time will be invested in trying to prove that a transaction is clean, but using AI you are able to zero in on fraudulent transactions,” he said.
He said the automated process helps to optimise the process and also enhances the security within the banking sector.
Mr Chinomona said there were a lot of authentication technologies that are AI embedded that the financial sector could use to address issues of cloning of cards and sim swapping fraud, which occurs when scammers take advantage of a weakness in two-factor authentication and verification and use a person’s phone number to access their accounts.
He added: “As the financial sector, we need to look at how we can embed AI in making sure that we actually monitor transactions, even geo-fencing of card usage. For example, when a card is transacted in Harare at 10 am and then within an hour that card is transacting in Mozambique, the intelligence of the system should be able to pick that it’s not possible to be within these two locations in a period of one hour. So that means the transaction has to be flagged and the card has to be blocked.”
South African-based professional services company, SoluGrowth Head of FinTech, Mr Adonis Mhlanga said integration of AI was a transforming power in the financial sector, proving to be a powerful weapon against fraudulent activities.
“By implementing AI strategically, Zimbabwe’s financial sector can enhance security, improve efficiency and deliver a wider range of innovative financial products and services, ultimately propelling the country’s economic growth,” he said.
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