Douglas Blakey
5 min read
The financial services sector is facing an inflection point in 2025 and beyond says Carol Hamilton. And staying ahead is not just about managing credit risk and preventing fraud. Instead, it is about leveraging AI, better data orchestration and an end to fragmented decisioning strategies.
But it means a lot more than just modernising decisioning systems. Getting risk decisioning right will not come from any isolated fix. Instead, there needs to be a change of strategy towards a holistic approach to credit risk decisioning and fraud prevention. And for that approach to work it means aligning data automation and decisioning processes to maximise impact.
A reactive approach to risk management will not effectively combat fraud and manage credit risk. Put simply, a reactive approach is no longer enough. Financial institutions need to embrace a proactive, AI driven strategy that integrates risk decisioning across the entire customer life cycle.
A successful approach includes real time, AI power decisioning, with AI driven models that continuously learn and adapt to new fraud patterns.
“It is a critical moment for a shift from a very reactive risk management approach to something much more intelligence driven, proactive and dynamic so that that credit risk is managed dynamically,” says Hamilton.
Fraud and credit risk are often managed in separate silos, says Hamilton. The result is inefficiencies and missed insights. A unified decisioning approach enables better risk assessment, faster response times and enhanced customer experiences.
Accordingly, financial institutions need to invest in unified decisioning platforms to eliminate silos, reduce inefficiencies and improve risk assessment accuracy.
While financial service providers increasingly recognise that AI can enhance credit risk assessments, strengthen fraud detection and improve operational efficiency, that is only part of the equation. It is true that AI adoption is accelerating but poor data integration remains a significant barrier.
The financial institutions that embrace this transformation will be better positioned to mitigate risks, drive growth and deliver superior customer experiences.
The extent of the challenge facing the sector was highlighted by a global survey conducted by Provenir earlier this year.
Key decision makers at financial services providers globally were surveyed to understand their risk decisioning and fraud challenges across the customer lifecycle, decisioning investment priorities, and AI opportunities.
