Enhancing Women's Security in Financial Transactions through AI Innovation

By: Srishti Baweja, COO & Whole Time Director, E2E Networks Ltd | Monday, 20 May 2024

Srishti Baweja is a seasoned professional with expertise in the field of finance, compliance, and accounting. She has earlier worked for prestigious organizations such as PriceWaterhouseCoopers and Hindustan Petroleum Corporation Limited. In 2013, Srishti joined the management team at E2E Networks Limited and eventually played the role of CFO and COO. In her current role, she handles the overall operations and management of the company in collaboration with CEO and Whole Time Director, Tarun Dua.

Fueled by vast amounts of consumer data and the wide use of digital devices, artificial intelligence (AI) systems are influencing today’s high-stakes financial decisions. These decisions are a vital part of our day-to-day life, determining our economic prospects as individuals, businesses, communities, and as women.

Historically, women have been at the receiving end of many fraudulent schemes globally. Also, women encounter more frequent credit rejections compared to their male counterparts and lower spending limits. These decisions, perpetuated by underlying datasets, are bad for business because in most geographies, women drive 70-80% of all consumer purchasing decisions.

So, let’s look at the different ways AI can make a difference in women’s lives.

Virtual Financial Assistants

For a lot of consumers, money is a private topic, and women are among those most reluctant to engage in financial conversations. But not asking questions they need help with can hold them back financially.

AI-driven chatbots can play a vital role here. For example, an AI-powered web application can allow visitors to type in their financial questions and receive immediate answers curated from content written by financial professionals. That way, any query can be answered even at 3 a.m. in the morning.

In a country like ours, where female literacy is lower than male, voice chatbots speaking in Hindi and other regional languages can be a life-saver for women who shoulder the responsibilities of running homes, raising children while also working in 9-5 jobs.

Reducing Bias

Getting a loan is often tougher for women due to biases in traditional lending practices. These practices rely on factors that can unfairly disadvantage women - like taking into account periods of absence from work due to maternity leave - leading to lower approval rates and worse loan terms.

New lending models powered by AI can help level the playing field. By focusing on more inclusive criteria, AI can ensure women have a fair shot at loans and other financial tools.

Risk Assessment and Credit Scoring

Traditionally, credit scores have been like a stubborn gym membership – you need a good score to get a loan, but you need a loan to build a good score. This leaves women, who are more likely to have limited credit history due to childcare responsibilities or career breaks, stuck in the slow lane.

New scoring models powered by AI can ditch the overreliance on credit history and delve into a richer data pool. Imagine algorithms that consider your educational background, job hopping patterns (which can be more common for women due to childcare needs), and even your responsible budgeting habits gleaned from social media. AI models can even analyze utility bill payments!

By using this broader data spectrum, AI can paint a more accurate picture of a borrower's financial health. The result? Fairer lending decisions and smoother access to financial products for women.

Financial Inclusion

AI isn't just about fairer lending; it's a financial inclusion powerhouse. Here's how:

Imagine AI as a financial GPS specifically designed for women. Using data analytics and machine learning, AI can delve into the unique financial behaviors, preferences, and challenges women face. Studies reveal that women are 1.3 times more likely than men to prioritize saving for their children's education. Insights like this can be a goldmine for financial institutions.

Armed with this knowledge, banks can develop products that resonate with women. Think microloans specifically designed for women entrepreneurs, savings accounts with flexible features for working mothers, or investment strategies focused on long-term goals like retirement or children's education.

Fraud Detection

Financial fraud can be particularly stressful for women, who may be targeted due to social engineering tactics or simply because they manage household finances. AI can help spot anomalies and help women here. Imagine a security system that knows your spending habits better than you do! AI-powered fraud detection uses vast datasets and clever algorithms to analyze your financial activity. If a purchase in Bandra, Mumbai, pops up when you haven't left your couch all week, or a money transfer occurs from a device you've never used, AI can spot it instantly.

This translates to real-time protection for you. AI can trigger immediate alerts, flag suspicious transactions, and even temporarily freeze your account until you confirm the activity. This swift action can minimize financial losses and the emotional toll of fraud.

Behavioral Biometrics

Behavioral biometrics is the security guard of the future, and it doesn't rely on easily stolen passwords. This innovative system analyzes how you interact with your device – your typing rhythm, mouse movements, even how you hold your phone. These unique quirks become your digital signature.

This is particularly helpful for women. Even if a fraudster steals your login details, they won't be able to mimic your one-of-a-kind typing style or the way you scroll through apps. It's like a secret handshake for the digital age!

This translates to greater security and peace of mind for women using online banking platforms. No more worrying about remembering complex passwords or falling victim to phishing attempts. Behavioral biometrics empowers women to take control of their financial security and navigate the digital world with confidence.

Special Needs of India's Booming Digital Economy

Our booming digital economy is a double-edged sword. While millions embrace mobile banking and digital payments, fraudsters see a land of opportunity. AI can be a critical shield here.

Initiatives like Digital India and UPI have supercharged our digital transactions. AI can step in as the guardian here, analyzing vast amounts of data to sniff out suspicious activity. We also have a blend of traditional banks and new-age fintech, which creates a complex web of transactions. AI can untangle these patterns and identify red flags that might escape human analysts.

India's mobile-first approach to finance makes AI even more crucial. By analyzing mobile transactions, AI can identify unusual behavior and nip fraud attempts in the bud.

AI can empower even those who cannot read or write. Voice-enabled tools allow users to receive financial guidance and ask questions through spoken instructions. This opens doors for previously excluded populations, fostering financial inclusion for all.