Artificial intelligence transforms South Africa’s financial sector
Regulators examine the impact of new technologies on the market and prepare recommendations for the industry
South Africa’s financial regulators note the active introduction of artificial intelligence (AI) in banks and insurance companies. The main task of these technologies is combating fraud in real time, according to a joint report by the Financial Sector Conduct Authority (FSCA) and the country’s Prudential Authority (PA). This was reported by the African News Agency (ANA), a TV BRICS partner.
Senior FinTech Specialist at the FSCA Nolwazi Hlophe stated that AI-based systems analyse transactions and identify suspicious operations, helping to prevent financial losses. For clients, this means enhanced account security and faster issue resolution.
She also noted that, in addition to security, AI is used to personalise services. Algorithms help offer clients tailored financial products, such as loans or insurance policies, while chatbots and virtual assistants provide round-the-clock support.
Moreover, artificial intelligence is beginning to revolutionise South Africa’s insurance market by introducing dynamic pricing and underwriting (the process of risk assessment by a financial institution). According to Hlophe, insurance premiums can now change in real time based on data on customer behaviour or information from Internet of Things devices, such as vehicle telematics or fitness trackers.
“Claims processing is faster and smarter, thanks to AI tools that verify and prioritise claims using natural language processing and image recognition,” she said.
The report is based on a survey of financial institutions conducted in 2024. AI is most widely used in the banking sector, with 52 per cent of institutions employing the technology. Among payment providers, the figure stands at 50 per cent.
Photo: Alex Sholom / iStock
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