UOB doubles down on AI with investment in Israeli fintech

Singapore

UOB is ramping up its artificial intelligence (AI) investments, as it took a minority stake in Israeli fintech firm Personetics on Thursday to boost its use of machine learning and data analytics across its markets in South-east Asia.

The investment amount was not disclosed, though it is understood that UOB has joined other global banks and investors such as Spanish lender Banco Santander in investing in the fintech company.

UOB will tap into Personetics' AI offering to draw patterns from the bank's huge volumes of transaction data. This is meant to help identify individual transaction demands, enabling UOB to provide customers with real-time and personalised guidance on their financial decisions.

The bank said that this service includes anticipating and prompting customers when their balances may be insufficient to cover upcoming payments, detecting unusual or suspicious account activity in their accounts and nudging them to save more or to spend wisely. UOB did not give a timeline for the full roll-out.

BT understands that the service is aimed at helping customers manage money better, rather than being used as a form of sales pitch, given that the data analysis comes from understanding customers' spending and payment patterns.

Dennis Khoo, UOB's head of regional digital bank and strategic initiatives, said that this investment will help the bank take a "giant leap forward" in having meaningful digital conversations with the bank's customers.

Dr Khoo told The Business Times: "We will use Personetics' AI tools to analyse transactional data to deepen our understanding of our customers' financial behaviour. We will then use these insights to anticipate their needs, to encourage better money management and to engage with them on a more personal level."

Personetics' AI service, which includes the use of machine learning and pattern recognition algorithms, have been developed, tested and refined over the past five years, and sold to financial service providers. Its other customers include Societe Generale, Wells Fargo and Royal Bank of Canada. According to the fintech firm, it serves more than 50 million bank customers worldwide.

UOB's investment in Personetics follows the set-up of its joint venture, Avatec.ai, in April this year. Avatec's credit assessment tool also uses AI to determine an applicant's credit quality in seconds.

UOB set up Avatec with Beijing-based Pintec Technology Holdings. The bank holds a 60 per cent share of Avatec while Pintec holds the remaining 40 per cent. UOB plans to invest up to S$12 million in Avatec over the next two years.

Pintec, which collects a fee for each use of its credit assessment model, uses non-traditional data points such as utility bills, call history and spending patterns to determine whether potential borrowers are able to pay up. It also taps into retail networks to be able to offer loans at the point of sale as well.

Avatec's credit assessment tool will be deployed across South-east Asian markets over the next two years.

READ MORE: UOB ups interest rate on flagship deposit account