Abstract
This study sought to investigate the impact of AI on digital financial inclusion. Digital financial inclusion is becoming central in the debate on how to ensure that people who are at the lower levels of the pyramid become financially active. Fintech companies are using AI and its various applications to ensure that the goal of digital financial inclusion is realized that is to ensure that low-income earners, the poor, women, youths, small businesses participate in the mainstream financial market. This study used conceptual and documentary analysis of peer-reviewed journals, reports and other authoritative documents on AI and digital financial inclusion to assess the impact of AI on digital financial inclusion. The present study discovered that AI has a strong influence on digital financial inclusion in areas related to risk detection, measurement and management, addressing the problem of information asymmetry, availing customer support and helpdesk through chatbots and fraud detection and cybersecurity. Therefore, it is recommended that financial institutions and non-financial institutions and governments across the world adopt and scale up the use of AI tools and applications as they present benefits in the quest to ensure that the vulnerable groups of people who are not financially active do participate in the formal financial market with minimum challenges and maximum benefits.
Highlights
Digital financial inclusion is increasingly becoming central in the debate on how to ensure that people who are at the lower levels of the pyramid become financially active (Peric 2015)
Digital financial inclusion through artificial intelligence (AI) can have access to various online shopping platforms and various online social networks which produces a large amount of information on individuals which will help to do away with the problem of information asymmetry between financial institutions and individuals (Wang and He 2020; Yang and Zhang 2020)
The study discovered that AI has a strong influence on digital financial inclusion in areas related to risk detection, measurement and management, addressing the problem of information asymmetry, availing customer support and helpdesk through chatbots and fraud detection and cybersecurity
Summary
Digital financial inclusion is increasingly becoming central in the debate on how to ensure that people who are at the lower levels of the pyramid become financially active (Peric 2015). Banks and non-banking institutions are building on digital ways that were in use for years through the direct application of artificial intelligence (AI) to improve access even to the people who were previously served by the formal financial institutions (Alameda 2020; Peric 2015). The term fintech or financial technologies is used to describe different innovative business models that have great potential to transform the financial services industry (Mamoshina et al 2018). Some other AI technologies that can be applied in the fintech sector to promote financial inclusion including audio processing, knowledge representation, speech to text, deep learning, expert systems, natural language processing, machine learning (ML), robotics, and symbolic logic (Paul 2019). It is believed that the popularity of AI technologies boomed in 2011 when companies like Google, Microsoft, IBM and Facebook embarked on a massive investment in AI and machine learning to be applied in the commercial space
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