Decision making in an increasingly complex environment

What it is about

Ricardo Mihalik, principal consultant at FICO for Latin America and the Caribbean, spoke at the Third Breakfast Conference (FICO Day Dominican Republic, February 2024) about why financial decisions are now made in a more complex environment and what capabilities institutions need to respond.

The 26 slides cover the complexity of the environment (data explosion, open finance, artificial intelligence, regulatory pressure and social and environmental concerns), changes in the customer profile, instant payments (with the Brazil case), hyper-personalization, responsible AI and the composable architecture of platforms.

Objectives

• Describe the factors that make the banking decision environment more complex.
• Explain how hyper-personalization and transaction data improve customer decisions.
• Set out the principles of responsible AI and of a flexible, modular architecture.

Key takeaways

1. Customers are more digital, informed and demanding, and that profile will keep changing with new generations.
2. In Brazil, instant payments exceed 150 million unique users and 3.9 billion monthly transactions.
3. Open finance gives customers control over which data they share, with whom and when, and opens new use cases.
4. According to a cited figure, only 27% of banking decision makers say they currently use AI to scale and optimize their operations.
5. Responsible AI requires a diverse team, a solid foundation, respect for the power of data and transparency; European Union regulation classifies AI uses by risk level.
6. A composable, modular, interface-based architecture allows faster adaptation to change.