What US financial services and fintech can learn from Singapore’s push to establish itself as an AI hub

In an era where artificial intelligence (AI) is beginning to reshape the landscape of global finance, Singapore stands out in its approach to innovation. As the city-state positions itself as an AI hub, financial institutions are keen to leverage this technology to enhance their services and operations. To gain insights into this evolving field, we spoke with Prateek Sanghi, Head of Visa Consulting & Analytics for Asia Pacific, about the intersection of AI and financial services in Singapore and beyond.

Sanghi, with his extensive experience at one of the world’s leading payment technology companies, offers a unique perspective on the potential of AI in finance. From discussing Singapore’s early mover advantage to exploring Visa’s substantial investments in AI infrastructure, this interview delves into the practical applications, challenges, and future prospects of AI in the financial sector. As we navigate through topics ranging from generative AI’s market potential to talent development in the industry, Sanghi’s insights provide an overview of how AI is transforming the world of finance and payments.

Given Singapore’s push to establish itself as an AI hub, are there any specific AI applications or use cases in finance that you believe Singapore firms may have an early mover advantage in developing and commercializing?

Singapore’s position as a global financial hub has given firms here a distinct first-mover advantage in terms of developing AI applications in finance. 

The country has in place a National AI Strategy since 2019, which provided a comprehensive roadmap for AI-driven transformation of crucial sectors such as finance, healthcare, education, and public services by 2030. Furthermore, Singapore’s vibrant fintech ecosystem enables an ideal environment for developing and testing AI solutions, which is supported by a robust digital infrastructure and overall progressive regulatory stance. Given the AI-friendly environment, Singaporean firms can leverage their deep domain expertise and access to high-quality data to build AI-powered tools for regulatory compliance and risk management, offering a significant first-mover advantage. 

Visa is excited about the potential of AI development in Singapore and Asia Pacific, recognizing its capacity to unlock data value, enhance operations, and boost efficiency and competitiveness. That’s why we actively engage with regulators, policymakers, industry partners and other stakeholders to promote trustworthy, responsible AI innovation in the region. From our position as a world leader in digital payments and an early adopter of AI, we have seen significant diversity between national and industry approaches to AI. We work with ecosystem participants and regulators to balance between providing safety guardrails, while encouraging innovation to unlock the potential of AI as a technology and the benefits it can deliver. 

Generative AI is projected to represent a $340 billion market opportunity in the banking sector. Could you elaborate on the specific areas or use cases where you anticipate the most significant growth and adoption in 2024?

Visa has a long history of using AI in payments to enhance value and security. With Generative AI (Gen AI), we see potential to further boost productivity and improve the payment ecosystem. This is why we launched Visa’s AI Advisory Practice, which advises clients on using AI effectively.

We see potential growth in a few areas. The key development we anticipate is in the area of “self-driving finance”. Given Visa’s work with technology and payments partners, we expect that AI bots will evolve from making recommendations and providing answers to become fully autonomous, with the ability to complete transactions. This means faster turnarounds for loan approvals, account openings and such driven by automated decision making. We will also continue to utilize Gen AI to bolster payments security. The combination of Gen AI’s tech stack and Visa’s expertise enables us to strengthen safety and security across all form factors — whether it is cards, mobile tokens or wallets — we are moving beyond our network to protect the integrity of the entire commercial ecosystem. 

As an industry, we are just beginning to unlock the potential of this $340 billion market opportunity. Beyond payments and security, Gen AI also offers opportunities to disrupt and drive change in areas such as hyperpersonalization and eCommerce. Visa is committed to developing impactful AI solutions that drive real business value and transform the future of financial services and we can only do so by working alongside like-minded partners. 

Visa has been investing heavily in AI and associated infrastructure over the past decade, with over $3 billion dedicated to these efforts. Could you share some examples of how Visa has successfully implemented AI solutions internally and externally with clients?

Before implementing any technological solution, Visa is cognizant of the importance of equipping our employees with the means and opportunities to familiarize themselves with AI solutions. Since 2023, Visa has deployed a secure instance of cutting-edge tools like ChatGPT-4 and Microsoft 365 Copilot, empowering employees to automate routine tasks to allow them to focus on more strategic initiatives while abiding by responsible AI usage guardrails. In the spirit of experimentation, Visa also hosted a record-breaking Gen AI Hackathon (6,000+ employees, 16 offices worldwide) in January 2024, providing a platform for employees to exercise creativity to tackle complex problem-solving and ideation by utilizing AI.

AI also features prominently in our product suite, particularly for security. These include Visa Account Attack Intelligence Score (VAAI Score), a Gen AI-powered tool developed to identify and score enumeration attacks, helping to reduce fraud and operational losses, and Visa’s Real-Time, Account-to-Account Payment Protection, a fraud prevention solution using deep learning AI to provide real-time risk scores for immediate payments. 

Accelerating AI innovation does not happen in silos and Visa champions collaboration in its AI endeavors. From our $100 million Gen AI venture initiative to the annual Visa Accelerator Program, we are investing in and nurturing companies focused on creating fit-for-purpose Gen AI applications that are commercially scalable. Additionally, we are actively collaborating with industry partners like Microsoft, and Google and government bodies like the Economic Development Board, Singapore to co-create solutions that will shape the future of commerce and payments.

Visa Consulting & Analytics has developed over 150 AI/ML models in-house. What has been the key to striking the right balance between building proprietary models and partnering with external providers? How do you approach the “build vs. partner” dilemma?

Striking the right balance between building proprietary models and external partnerships starts from leveraging our core strengths in harnessing unique data sets and expertise in fraud prevention. Visa Consulting & Analytics’ data science team leverages core data assets — either from within Visa or our clients — to derive insights pertaining to specific business problems and formulate actionable recommendations to solve them. A prime example is our work with Shinhan Bank, where we optimized their AI adoption and cloud infrastructure, combining our expertise with their data to address core business needs.

Our approach to the “build vs. partner” dilemma is nuanced. We leverage our internal strengths where they provide the most value, such as in developing tailored solutions for promotional targeting across different cardholder segments or analyzing tourism trends for governments, as was done by Visa Australia for a local regulatory body. Simultaneously, we leverage partnerships to complement our capabilities and push the boundaries of what’s possible across the payments ecosystem.

Ultimately, our goal is to deliver the most safe, effective and sustainable solutions for clients. Whether that means utilizing our proprietary models or collaborating with external providers, we prioritize outcomes over origin. This flexible strategy allows us to stay at the forefront of AI innovation while enacting data-driven recommendations for real-world applications across various business sectors.

As a global organization, how does Visa tackle the “innovator’s dilemma” and continue to foster innovation while maintaining its core business operations? What strategies or initiatives have been particularly effective in enriching the broader financial ecosystem?

Visa tackles the “innovator’s dilemma” by promoting a culture of experimentation and introducing agility into traditional organizational structures. After all, AI can be used to challenge current frameworks with the opportunity to disrupt and bring new innovation, and it starts with us. From running internal hackathons to creating dedicated innovation teams within business units, resulting ideas range from writing more efficient code to fend off cyberattacks to hyperpersonalized offerings for cross-border travel — of which many are being worked on now as actual projects. This ensures innovation is embedded across all core business operations for sustainable AI implementation at scale.  

At the same time, we are seeking to harness the technology to improve security and network reliability across our business, and beyond. These efforts build on our existing fraud and risk management services and capabilities. For example, Visa’s Advanced Authorization (VAA) combines Visa’s proprietary online authorization model with offline neural network-based machine learning to evaluate fraud risk across the entire Visa Network (VisaNet) in real-time, eliminating potential fraud risk before transactions go through. Moreover, we are extending beyond our network to enhance fraud protection across the entire commercial ecosystem. Our AI-powered fraud risk management solutions are now network scheme agnostic, allowing simplified fraud operations for issuers with strengthened protections across various touchpoints, while reducing cost.

Could you share your perspective on the talent and skills required to effectively leverage AI in the financial services industry? How is Visa Consulting & Analytics contributing to building this talent pipeline?

Data is an intrinsic component of AI, and effective data brings productivity gains as enhanced by AI/ML. At Visa Consulting & Analytics, the job is never static. Situated in the middle of tech and business, we play a critical role in interpreting insights from data outputs and liaising with other subject matter experts across the business. With tasks involving both data analysis and project management, effective cross-functional collaboration between teams is critical to understand client challenges and create solutions tailored to their needs. As such, agility in thinking, processes and structure is critical to upskill and retain competitiveness in today’s global talent economy.

It’s also important to create a culture that fosters creativity and experimentation to effectively harness AI in the financial services sector. Constant experimentation with natural language processing, sentiment analysis, and large language models helps us identify ways to use those techniques to add value to our partners, clients, and the payments ecosystem. By leveraging such new technologies, we hope to support clients in their customer satisfaction efforts and guide financial services towards a more customer-centric future. 

Recognizing this, Visa is actively recruiting and retaining talent spanning across the globe to continue driving our Gen AI initiatives forward — be it data scientists with localized regulatory expertise on data security or strategic leaders who understand the unique challenges that come with embedding AI models in the financial domain.