Artificial intelligence (AI) is rapidly transforming the financial industry, particularly in the payments sector, where it addresses longstanding issues that have hindered cross-border settlements. In East Africa, banks are embracing this technological revolution, increasingly deploying AI to enhance cross-border payment services for both local and international clients.
Jeremy Awori, the CEO of Ecobank Group, notes that financial institutions in the region are leveraging AI primarily to counteract fraud in payments, improve customer experiences, and accelerate the efficiency of transaction settlements. “AI engines are analyzing transaction patterns. This data can be utilized to enhance customer experiences and detect anomalies, thereby minimizing incidents of fraud or theft,” Awori stated.
AI technology enables banks to analyze the transactional behavior of customers, allowing them to recommend tailored products. For example, they can identify a customer’s frequent business dealings between Kenya and Tanzania and suggest solutions to facilitate their trade. Additionally, AI can flag unusual payment patterns that seem atypical for a customer, effectively preventing fraudulent activities without human intervention.
A recent global study by KPMG reveals that AI adoption in the financial sector is on the rise, with 29 percent of surveyed firms operating at advanced levels of AI implementation. The majority of companies are utilizing AI for financial planning, risk management, treasury management, and tax operations.
However, in East Africa, one significant hurdle remains: the high cost of cross-border payments. Currently, payment corridors in the region rank among the most expensive worldwide. For instance, a Tanzanian purchasing goods or services in Uganda may face transaction fees that consume up to 50 percent of the total amount, with lengthy settlement times further compounding the issue.
