AI and Web3: Driving innovation and inclusive growth in financial services
These technologies can enable smaller businesses to operate more efficiently and access funding flexibly
The financial services revolution continues to gain momentum, and Ant International has identified artificial intelligence (AI) and Web3 as crucial drivers of innovation.
“Our priority remains to drive inclusive and sustainable growth through financial services innovation,” said Douglas Feagin, President of Singapore-headquartered digital payment and financial services provider Ant International.
Advances in Web3 technologies, for instance, will support further innovation in tokenised bank deposits, making global fund transfers and liquidity management more secure and efficient.
Web3, which is still in its nascent stage, refers to a decentralised internet where users have more control over their data and interactions.
Meanwhile, the broader adoption of AI will improve risk management and help smaller firms manage their foreign exchange (FX) exposure. AI will also enable greater personalisation of digital services, he said.
Backbone of innovation
AI has been powering Ant International’s various businesses, underpinning its five core tech pillars: Credit, platform, payment, risk and wallet.
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“Over the years, we have continued to leverage AI to not only enhance the efficiency and security of transactions, but also enable greater cost savings and stability for merchants,” said Feagin.
“Over the years, we have continued to leverage AI to not only enhance the efficiency and security of transactions, but also enable greater cost savings and stability for merchants.”
Douglas Feagin, President of Ant International on how AI has been powering the company
One example is the company’s AI-driven FX engine, which Feagin said forecasts FX demand with great accuracy by hours, days and weeks.
This helps merchants lower working capital requirements and manage FX rate fluctuations, providing more predictability and cost savings in international transactions.
In risk management, Ant International’s AI systems can detect deep fakes, helping companies prevent fraud, identify suspicious customers, and mitigate risks like money laundering and credit card fraud.
Its credit tech solutions also assist lenders in evaluating the creditworthiness of small and medium-sized enterprises (SMEs), expanding their access to financing (see story below).
Driving partnerships
Asked about industry consolidation, Feagin noted that payments is a vast space, allowing room for different players to serve different needs.
“Ultimately, it boils down to customer-centricity and the value that each player offers to consumers.”
Leading fintech players in the region have also evolved beyond payments, integrating services that cater to daily needs like travel and financial services.
Feagin emphasised Ant International’s commitment to working together with regulators, banks, fellow fintechs and others in the ecosystem “to create a better, digitally-enabled future”.
The company’s Alipay+ ecosystem of partners includes more than 30 payment apps. In South-east Asia, its partners include Touch ‘n Go eWallet in Malaysia, GCash in the Philippines, TrueMoney in Thailand and OCBC Bank in Singapore, which use Alipay+ technologies to enable overseas payments.
At the upcoming Singapore FinTech Festival, Ant International plans to announce developments including:
- An expansion of Alipay+ merchant coverage in popular travel destinations;
- A new SME payment product;
- New embedded financial services partnerships; and
- A sustainability initiative to support micro, small and medium-sized enterprises (MSMEs).
Regulators play a vital role in fostering an environment that encourages both the development and adoption of AI solutions, Feagin noted.
He sees regulators playing two roles: “(First) as a platform to encourage a high-trust climate to give innovators space and confidence to push technological boundaries.
“And (secondly) as an arbiter to facilitate a consensus on the values and norms that will inform the sustainable and ethical use of AI.”
“We believe that financial services innovation will unlock great opportunities across communities and along the entire value creation chain,” he said, “and the only way we can achieve that is through collaboration.”
Supporting SMEs
SMEs are a core focus for Ant International. “They form the backbone of the global economy,” said Feagin.
“When they succeed, we all benefit, which is why many of our innovations are particularly focused on empowering this segment of businesses.”
Ant’s initiatives for SMEs are to help them:
Reach globally
- Its cross-border payment solution Alipay+ enables 90 million global merchants, many of them SMEs, to accept payments via QR codes from overseas customers. In Singapore, Alipay+ transactions via SGQR – the nation’s unified payment code – at hawker stalls rose 52 per cent in the first half of 2024 compared to the previous six months, according to Ant International.
- WorldFirst, its digital payment and financial services platform, supports over a million SMEs, facilitating international payments in over 200 markets with more than 100 currencies.
Transform digitally
- Merchant payment and digitalisation services provider Antom, a subsidiary of Ant International, connects merchants to hundreds of payment methods, including mobile wallets that are Alipay+ partners. It supports merchants in over 40 markets.
- Antom’s D-store solution helps merchants, especially SMEs, set up online stores, launch it on regional mobile wallets, and integrate online and offline operations. Over 5,000 stores in South-east Asia have used this solution.
Access funding flexibly
- Anext Bank, Ant International’s Singapore digital wholesale bank launched in 2022, and bettr, its global digital lending service, provide embedded financing options for MSMEs.
- Anext Bank allows business owners to set up an account virtually, and offers loans ranging from S$5,000 to S$500,000. About 70 per cent of its customers are micro businesses across Asia and beyond. The digital bank recorded a six-fold increase in cross-border transactions over the past year.
Build capabilities
- Ant International partners various organisations to provide SMEs and underserved communities with resources, networks and training. Its initiatives include the 10x1000 Tech for Inclusion global fintech education platform, and SisBerdaya, a female entrepreneurship programme in Indonesia.
This was produced in partnership with the Monetary Authority of Singapore and the Global Finance & Technology Network.
For more stories, go to https://bt.sg/sff2024
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