Let’s Reshape Your Digital Payment Space with AI | By Charles Richard

Let’s Reshape Your Digital Payment Space with AI

Over the past few weeks, I have come across ample of thread circling my corner of the internet. It all started with a question- can artificial intelligence (AI) spur the next revolution in every aspect of our lives. Well, I can give you plenty of such examples where modern AI will be seen setting a benchmark in different domains, of course, related to payments. 

Evolution has been constant among all industries across the globe and the finance and payment industry is no exception. I remember the time when our ancestors exchanged bartered cattle for grain and now we have created a world of mobile banking. Unlike before, banking customers these days want personalized experiences, accurate information, frictionless processes, and prompt services. As a result, banking sectors have started inheriting digital technologies such as AI, chatbots, web self-services to improve customer experience. 

But the question is how?

AI creates a virtual representation of every relevant business entity by simply building a profile from their actions and activities. Let’s say, for example, the profiles feature cardholder, merchant and terminal details of each individual. Still confused? 

Chatbots or smart agents have this potential to learn in real-time from every transaction, then track behaviors. For example, if there are 10 million active cards, a smart agent will work on each card analyzing cardholder’s behavior continuously. Banks will also be able to make customized decisions in context to each cardholder. 

As I said, these agents are active and self-learning which can predict where and when cardholders will make their next purchases with frightening accuracy. Moreover, this individualized information enables more effective promotions, such as campaigns, to increase card usage. It also enables automated customer service online, via telephone and even via chatbots — computer programs that can have conversations and service customers. These chatbots have become so sophisticated that they are capable of learning to recognize voices and images. 

3 Phenomenal ways consumer banking is being revolutionized with AI

Fraud Detection- With the continuous increase in global transactions, a sudden increase is also been observed in online fraud. According to cybersecurity firm McAffee, online fraud accounts for a large part of the $600-billion toll cybercriminal activities take on the global economy every year. Several attempts have been detected in regards to flagging fraudulent transactions based on geolocations, IP addresses, the difference between billing and shipping addresses, the amount of purchase, and the type of items. Having high fraud mitigation ends up in creating an inconvenience for customers. And at the same time attackers are able to bypass these types of restrictions through the use of tunneled proxy IP addresses located within the vicinity of the real cardholder zip code. By using AI, merchants and financial institutions can make a more granular analysis of the tons of data; of course of fraudulent activities. In addition to this, these data points won’t just give insights on the probability that a transaction is fraudulent, but can also indicate that a user account may have been compromised for use in fraud—or that a new ‘fake’ account was created specifically to carry out fraud.   

Credit Scoring – Do you really think that the most accurate way for determining whether you are liable for loans is based on your credit score? For those who don’t know credit score is something which takes all your financial records into account such as income, banking history, tax payments and so more. Of course, this system works best only for those whose credit and banking history is well recorded. But what about those hundreds of millions of underbanked people? 

Here comes AI to the rescue, several companies are seen creditworthiness and risk assessment in loans to provide better opportunities for everyone. This effort aims to address the lack of interpretability of machine learning and deep learning algorithms, which is one of the main pain points of using AI in sensitive operations such as determining credit scores and processing loan applications. 

Improved Customer Service- We all are well-versed with the fact that tools like IVR, chatbots, and self-service websites will never go out of use. By using artificial intelligence things can be improvised to a great extent. Machines are no longer stoic; on the contrary, they are capable enough to understand human emotions and reciprocate accordingly. The gap between utilizing a customer’s preferences and needs to deliver real-time, relevant information seems to have entirely blurred making the person feel special. As a result, it increases customer satisfaction and retention, creating mutual value for the customer and the organization.



Charles Richard is a Business Analyst at Tatvasoft UK. Besides his profession, Charles likes to share some new and trending technical aspects. Please visit https://www.tatvasoft.co.uk/ to know more about his leading iPhone app development company based in London.

January 8, 2020
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