As artificial intelligence (AI) appears poised to revolutionize financial services, Andreas Lutz, CEO of global treasury solutions leader Fides, discusses the potential benefits of AI-powered treasury services, using AI to bridge the API connectivity gap with legacy systems and mitigating risks through responsible AI.
Global Finance: How is Fides incorporating AI into its services and how will clients benefit?
Andreas Lutz: Fides recognizes the accelerating pace of AI advancements and its significant potential in the financial services sector, particularly for optimizing corporate treasury operations. We are currently working on integrating AI into our services to enhance client benefits.
Through AI algorithms, our data-driven insights and predictive analytics enable clients to make informed financial decisions, improve cash management and reduce risk. AI-powered automation streamlines processes, saving time and minimizing human errors. Our current services already reduce manual intervention in areas like workflow management, fraud detection and sanctions screening, with AI poised to further enhance efficiency. This commitment positions Fides clients as innovators in their industries, and we have exciting solutions in development, set to be revealed in the coming months.
GF: How is Fides guiding clients that might rush to embrace AI in the fear of missing out?
AL: There’s a lot of fear and uncertainty around AI adoption at the moment. Fear of the unknown, but also fear of being left behind competitors who may roll out AI-powered technology faster. While we believe AI done right is vital to the future of treasury, companies must perform due diligence and not just implement AI technology simply because it’s the new buzzword. There are valid concerns about responsible and ethical AI.
Fides is approaching AI with a calculated strategy. We are thoroughly testing AI-driven solutions — tools on the market today as well as our own developments — to mitigate potential pitfalls and ensure we are delivering secure, responsible AI in combination with the powerful services we have been providing to clients for decades.
Our focus is on tools and services that address our clients’ actual challenges and needs and go beyond industry and market trends. As a customer-centric organization, we work in close partnership with our clients on every implementation. That includes thoroughly assessing each of their specific needs to understand how AI aligns with their strategic objectives.
GF: Do APIs offer similar transformative potential and how does that impact Fides?
AL: APIs definitely hold promise, but the overall adoption curve appears to be much slower. Today’s financial landscape is a blend of cutting-edge digital systems and entrenched “legacy” protocols such as SWIFT, EBICS and direct connections. Many banks have yet to fully embrace APIs, making the coexistence of modern and traditional systems a practical necessity.
AI could bridge the gap between the hype of APIs versus today’s reality, opening the door to greater innovation. AI algorithms can facilitate data translation and normalization, intelligently converting data from “legacy” systems into formats that are compatible with modern APIs. And AI-driven insights can empower precise transaction categorization and risk assessment, regardless of the underlying infrastructure.
For Fides, an API is just another connectivity option that we support. Our connectivity doesn’t rely on one specific communications protocol — that’s part of what distinguishes our offerings and makes us a market leader. Our services facilitate seamless integration with legacy and new technologies, so we can best serve our clients no matter where they or their banks are in their technology journeys. Fides provides connectivity to more than 13,000 banks and financial institutions, of which over 3,000 are direct bank connections. Organizations use us as a SWIFT Service Bureau, for host-to-host connections, regional connectivity channels such as EBICS and, of course, for API connectivity. AI will help us continue to improve our services and power additional innovation.
GF: As use of APIs increases, what are the risks and how can we mitigate them?
AL: With cybercrime on the rise, all organizations must be hypervigilant for security threats and ensure their teams are trained to spot and report any red flag activity. API vulnerabilities can allow attackers to gain access to personally identifiable or confidential data, execute ransomware, take down operations with denial of service attacks, and much more. That’s in addition to standard security concerns around phishing or malicious attacks that can lead to payments fraud, money laundering or other operational disruptions.
Fides takes both security and risk mitigation extremely seriously and we do our utmost to ensure our clients are protected. We implement encryption protocols and multi-layered authentication mechanisms, practice data separation and hold regular security audits to safeguard sensitive information and prevent unauthorized access.
Our payments and account management services include risk mitigation tools such as validation and sanctions screening. Open communication is another cornerstone of our risk management strategy. We work closely with each of our clients to ensure they understand the security measures we have implemented and actively participate in fortifying their systems.
GF: How is Fides mitigating AI risks?
AL: In addition to concerns about ethics and responsibility with AI, security, data privacy, accuracy, transparency and accountability are all top of mind issues. However, AI can also be used as a force for good, generating new and more powerful solutions that can adapt to mitigate new risks as fast as they arise.