Artificial intelligence (AI) is transforming the global banking landscape rapidly, with Malta’s financial services industry forming part of this evolution. From front-line customer interactions to behind-the-scenes operations, financial services organisations can leverage AI-powered solutions to enhance service delivery, strengthen security and tailor experiences to individual needs.
While both European regulators and banks are embracing AI as a force for innovation and workforce improvement, policymakers are vigilant, making sure that AI is applied responsibly and ethically.
Banks in Malta and across Europe can promise to deliver faster service and smarter fraud protection with the use of AI – but only with careful attention to customer privacy, fairness and clear human oversight.
Smarter, personalised service for customers
Many banks are using AI to enhance the customer’s experience. Virtual assistants are now handling routine questions 24/7, providing customer support around the clock and allowing human staff to tackle much more complex tasks. By understanding several different natural languages, including Maltese, virtual assistants can be more accessible and convenient for everyday users.
With the help of machine learning and pattern recognition, banks can tailor product offers and advice to each individual customer. For instance, when a bank’s app notices a user routinely transferring money to one account, it might suggest a small business account or a savings plan.
Personalisation is still growing in banking, but banks are exploring how AI can suggest the right loans, credit cards or investment tips to each person at the right time.
These customer-facing AI tools make banking faster and more user-friendly. They also generate valuable data insights: by seeing what questions customers ask most often, banks can improve their services. However, this relies on careful data practices and human oversight so that AI interactions remain ethical and fair.
Improved safety and efficiency
Behind the scenes, banks are using AI to strengthen security, assess risk and speed up internal processes. A key application is fraud and anti-money-laundering (AML) detection.
AI systems continuously analyse transaction data and watch for suspicious patterns. Instead of only reporting known frauds after they occur, AI helps banks prevent them in real time.
When customers feel that the technology is working in their interest, AI can help banks grow while safeguarding trust
Huge volumes of data can be reviewed in seconds, uncovering subtle anomalies that humans might miss, resulting in faster alerts on fraud or illicit activity, also keeping a bank compliant with EU financial-crime regulations.
Another use of AI includes the automation of routine processes. AI and robotic process automation (RPA) can fill out compliance reports, extract data from documents and carry out repetitive tasks that humans used to do by hand.
For instance, banks can use generative AI to automatically summarise customer support calls or extract relevant facts from financial reports. This can help in reducing delays and errors. These ‘behind the scenes’ tasks will ultimately translate into cost savings and a smoother service for customers, by adding efficiency and accuracy in everything from transaction monitoring to staff workflows.
Banks across Europe, including Malta, are all at different stages of AI adoption. Many of the largest banks have already launched pilot projects in virtual assistants and predictive analytics. Often partnering with fintech firms, banks are mainly focusing on fraud alerts, credit checks and market trend analysis.
The main aim of European banks is to use AI and cloud technologies to innovate and grow customer loyalty, shifting focus from cost-cutting to customer growth.
Apart from innovation, regulation is a top theme in finance. Europe’s banks must abide by comprehensive rules on customer privacy, data protection and financial stability. Inherently, any new AI project must also meet strict standards.
The EU AI Act requires any financial institution that makes use of AI to maintain transparent data governance and audit trails. The Act requires banks to document how their AI models work and to ensure they are highly accurate and free from bias. Additionally, these tools must be used to assist and facilitate a human expert’s daily work. This still requires that all AI outputs are overseen, with the human expert making the final decision.
Trust, transparency in AI tools
Ultimately, a bank’s goal is for customers to trust their technology. That means clear communication and safeguard, by publishing plain-language overviews of their AI tools, explaining how the tool works and how the customer’s data is protected, and by ensuring that a human remains in the loop when the tool is providing insights and assisting in decision-making.
Trust is key. A bank’s main priority must always remain to ensure data security, comply with GDPR and other important regulations, and ensure that bias and unfairness are mitigated from the decisions being made, even by the AI tools themselves. A reliable and effective AI tool must adopt clear ethical guidelines, abide by regulations imposed by regulators and help build better customer relationships.
In conclusion, by harnessing AI, financial institutions are making banking smarter, faster and more user-friendly. When customers feel that the technology is working in their interest, AI can help banks grow while safeguarding trust.
The story ahead is one of transformation: of digital-led banking that serves people better, backed by responsibility and clear rules. That balance – between cutting-edge innovation and ethical guardrails – will define the next chapter of banking in Malta and beyond.
Janice Balzan is an AI architect and a member of Bank of Valletta’s IT Division.
The information provided in this article is based on the personal opinion of the author and is being provided solely for information purposes. This information should not be construed as investment advice, advice concerning investment products or decisions, tax or legal advice.