Driving Financial Industry Performance through AI

Dong Shou
Co-founder, Advance Intelligence Group
CEO, ADVANCE.AI

1. Driving Financial Industry
Performance through AI
Dong Shou
Co-founder, Advance Intelligence Group
CEO, ADVANCE.AI
OJK Institute Webinar
July 25, 2024

2. Agenda
Advance Intelligence
Group: Who we are/our
journey
Introduction
Building AI Capabilities
in Indonesia’s FS
industry
Role of AI in Improving
Business Efficiency

3. Let me start with a photo… eight years ago

4. Journey of Advance Intelligence Group: Growing with Indonesia
2016
Provided A.I.-based
bespoke solutions on
fraud prevention and
credit scoring to
large FIs
2017
Launched Kredit Pintar app for
trusted, fast, affordable loans.
Licensed & supervised by OJK
2019
Launched Atome BNPL
2021
Signed 10-year, 500M USD
strategic partnership with
Standard Chartered Bank
to grow Atome and KP In
Indonesia, SE Asia
X
2022
Secured USD100M
facility with HSBC for
Indonesia + Southeast
Asia expansion
2023
ASEAN Fintech winner
@S’pore Fintech Festival by
Singapore’s central bank MAS
2024
Secures up to USD100M
financing from EvolutionX
and other investors
Series A US$6m Series B US$14mSeries C US$68m Series D >US$400m

5. Supporting the digital economy in Indonesia
78M
Underbanked served
via FI partners
40M
Customers
via Atome Financial
2.5B
Cumulative loans
disbursed (USD)

6. AI fuels the Advance Intelligence Group ecosystem
Digital
Financial
Services
Credit
Bureau
Predictive AI & Generative AI

7. Advancing mission of financial & digital inclusion with global partners
Judy Hsu
CEO, Consumer, Private & Business Banking
Atome Financial’s experience will
allow us to drive greater financial
participation of those
underserved and underbanked.
Harish S Venkatesan
MD, Head of Int’l Subsidiary Banking, S’pore
Innovative companies like Atome
Financial are driving Southeast
Asia’s new economy growth. We
are glad to play a role in
supporting their ambition.
Ben Howell
Regional Head of Consumer for Asia-Pac
With Atome, we are leveraging
technology to narrow the
insurance and consumer
protection gap in Southeast Asia.

8. AI-powered credit/risk underwriting recognised by Singapore

9. Certified, industry-approved data security & encryption standards
➔ Compliance, data security & privacy are key CEO priorities, and implemented top-down and across Group
➔ Employ industry-based advanced encryption technology to protect consumer & transaction data
➔ Strict access control, regular audits and company-wide staff trainings

10. Crucial Role of AI in Improving Business
Efficiency & Competitiveness

11. #1: Increase business & operational efficiency
Top ecommerce platform
75%
automated ID
verification
for merchant onboarding,
reducing human error/ fraud
+ redeployment of resources
eKYC – Identity Proofing
Legal identity
capture/check
OCR + IQA
ID Forgery
Liveness
Detection
Face Search
Face
Comparison
Biometric
check
Dukcapil
Government
database
++

12. #2: Enhanced risk assessment & fraud detection
Large local bank uses AI to analyse transaction patterns and detect fraudulent activities in real-time.
Initial Phase
Integrate AI models into
transaction monitoring.
Start with high-risk transactions
(eg cross-border transfers)
Scale
Trained AI to cover other
transactions.
Incorporate feedback from
flagged /confirmed fraud
cases to refine AI models.
Outcome
Cut fraud rate by 40%
(reduce false positives,
increase accurate detection).
Loan processing cut from 2
weeks to 2 days.

13. #3: Personalised credit & loan underwriting scenarios
➔Increase coverage of unbanked (eg 77% have 1 mobile plan)
➔Custom score reports (eg 2-wheel financing, SME loan)
➔Product recommendations x purchasing/ecommerce data
➔Collections (eg contact tracing)
Traditional
Data
Credit history
Bank Info
Personal Data
Education
Balance/Reload
Alternative
Data
Ecommerce data
Active Status
Device Info
Social Network
SIM Age
Location
Using telco & alternative data, powered by AI:
Risk underwriting: Incorporate historical claims,
geo location data for travel claims
Customer service: streamline claims process
Spotlight: Insurance sector

14. #4: AI-based risk management & credit underwriting for rural banks
Case Study:
Consider a rural bank in a farming community.
By using AI, the bank can:
●Enhance risk management: Analyse satellite
imagery & weather data to assess crop health
and predict yields.
●Alternative credit scoring: Telco, social media
and ecommerce usage to gauge economic
activity of borrowers with thin credit history.
●Early warning system: Monitor local market prices
for agricultural products to anticipate income
fluctuations and adjust credit terms.

15. #5: Reducing NPL through early detection and predictive analytics
European FI used AI-driven predictive
analytics to flag at-risk loans
> reduced NPLs by 15%,
via financial counselling, automated
payment alerts and restructuring options
to at-risk borrowers.
Utility bill payments
Social media activity
eCommerce transactions
Spending behaviour
External market conditions
AI-powered early warning systems
continuously monitor borrower behaviour:

16. Building AI Capabilities in
Financial Institutions in Indonesia

17. This is what an AI-first bank of the
future might look like…
Data architecture: Is a single unified
360-view of your data accessible?
Core IT systems: Can it handle higher
data & transactions volume?
Culture: Is your staff ready for
re-learning and up-skilling?
But first, some thought starters…
Source: ‘Can banks meet the AI challenge?’, McKinsey & Company, Sep 2020

18. Expanding Indonesia’s AI talent pool is critical
Source: OECD.AI data, data from China, Singapore, Malaysia not available
How?
●industry training partners
●industry-academia exchange
●govt/corporate scholarships
●AI innovation labs
●international exposure
●attract global talent
Indonesia
AI roles in demand: research & data
scientists, machine learning engineers,
AI ethicists

19. Suggestions on the crucial role of OJK related to AI
●Clear policy roadmap and AI Code of Ethics
●Regulatory benchmarking & global/regional standards alignment
●Practical guidance and support for innovation
Source: Singapore National AI Strategy (NAIS v2.0) framework
Key resources
Empowerment
Capabilities GovernanceSecurity
Excellence
ResearchInnovation
Ecosystem
TalentData &
Models
Compute &
Tech Stack
Key recommendations for AI Implementation in Financial Services

20. Thank you.