Banks across Asia-Pacific are undergoing a structural shift as artificial intelligence (AI) increasingly influences customer acquisition, financial decision-making and risk management. A report by Fintech News Malaysia highlights that banks treating AI only as a technology upgrade could lose ground to institutions redesigning their decision-making architecture around AI.
The economic opportunity is significant. AI leaders in banking could potentially increase return on tangible equity by up to 4 percentage points, while AI could also erode as much as US$170 billion in global banking profit pools over the next decade as value shifts towards AI-driven intermediaries and platforms.
Customer relationships are also changing as consumers increasingly use AI agents to compare financial products and potentially execute financial decisions. Banks may therefore need to compete not only for customer attention but also for selection by AI systems.
At the same time, regulators across APAC, including RBI, APRA, ASIC, MAS, OJK and Bank Negara Malaysia, are increasing scrutiny of AI transparency, explainability and accountability.
Fraud is another major concern. Sophisticated scam networks increasingly combine automation, social engineering and AI, including attacks where legitimate customers are manipulated into authorising transactions themselves.
The emerging approach is to move beyond isolated AI projects towards connected decisioning across credit risk, fraud, customer management and origination, allowing intelligence and policies to be reused across banking functions.
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