The card payments industry is seeing many trends, and the adoption of Artificial Intelligence (AI) is one of them. There’s heightened interest over the capabilities of AI in fulfilling business needs. AI’s growth is due to what The Financial Brand calls the “perfect storm,” thanks to three core elements: machine learning, the explosive growth of big data, and neural net. You can expect the technology to reign over the payments industry soon enough.
AI: The Voice of Digital Assistants
As businesses turn to tech-driven payment systems from providers, like Merchant Card Advisors, consumers become more comfortable with their credit card transactions. The volume of digital payments will mean massive amounts of data. AI allows businesses to process such transactions promptly and securely, keeping fraud at bay.
Just how much transaction is going to take place? A CNBC report, citing a study from Capgemini and BNP Paribas, states that digital payments will reach $726 billion by 2020. People still pay in cash, to be sure, but e-payments are gaining ground. With the ease and relative security of the technology, you can expect further business adoption and consumer use in the coming years.
The introduction of more innovative features is also part of the allure. Financial institutions could use voice assistants that can handle banking functions. One example would be OCBC Bank, which tied up with Google to jumpstart the first AI-powered voice banking in Singapore.
The technology will let customers converse about bank services, such as planning future savings, calculating mortgage loan amounts, looking for the nearest branches or ATMs, and getting the latest finance market updates.
Voice technology encourages an interactive platform to create a frictionless consumer experience. But voice interfaces are just one of the significant improvements.
AI and The Management of Big Data
AI will allow financial institutions to measure and track metrics in an automated high-volume way, improving data collection, analysis, and application. It will enable the processing of website analytics, like IP location, visitor arrival time, and the duration of stay, into one database for reporting across the platform. If this should take place, consumers can expect a quicker bank experience and many self-serve options.
Meanwhile, machine learning algorithms will manage data into various models and patterns. Big data processes the information, but the algorithms will fine-tune every trait and element for further detail. The card payments industry may be able to predict outcomes as machine learning collects and processes the data.
Neural net, on the other hand, powers artificial deep learning. AI has wired it to model the human brain’s neural network. One central algorithm will analyze incoming data and draw conclusions, despite the limited available elements.
AI will give more time for bank employees and others in the industry to address issues that need more human brain power.
Fraud detection will be easier with AI enabling easier tracking of transactions, identifying patterns, and learning continuously to determine outcomes. The technology can act as a primary protective gate for every single transaction made via electronic payments.
Here’s a quick breakdown of how AI could uncover and prevent fraudulent transactions:
- Big data will take note of each customer’s purchasing behavior, such as common purchases, common shopping times, and common locations.
- Machine learning will process the data for every transaction, identifying any patterns anomalies in the consumer’s spending and shopping.
- Neural Net will assess the authenticity of a purchase that fits or doesn’t fit into the patterns determined by machine learning algorithms.
AI technology can make all things better for the card payments industry and everyone, not just the industry, will be on the receiving end of its benefits.