How AI Is changing the payment industry

With the advent of online shopping and innovative technologies, the payment industry has gone digital. The Covid-19 pandemic brought about a dramatic increase in the number of online payments. This rapid growth has inevitably raised the threat of security breaches and fraudulent cases. To combat this, Artificial Intelligence can provide a solid security backbone for payment processing. To learn more about the role of AI in payment processing, read on!

Machine learning

The growing volume of big data will have an impact on every sector of the economy, including the payment industry. Machine learning, especially in cases of dynamic data sets, will help detect anomalies and improve predictability. Ultimately, this technology will improve payment processes across the board. Let’s explore how AI and machine learning can be used to improve the payment industry.

Detecting fraud and money laundering has become easier thanks to advances in machine learning. These technologies enable banks and credit card companies to reassure customers by detecting fraud and money laundering faster than ever before. Advanced machine learning can analyze account activity and flag suspicious transactions without requiring human intervention. This technology can also reduce the time needed to investigate a fraudulent transaction. While this technology may not be the answer to every payment problem, it can help companies make the entire process easier for customers.

Vision recognition

The advent of computer vision has made it possible for businesses to automate routine processes. For instance, computer-vision software can assess the state of motor vehicles using satellite images. Using this software, insurers can receive ready reports of any vehicle damage, allowing them to make better decisions about a customer’s insurance needs. Another benefit of computer vision is that it can reduce manual paperwork. Several fintech companies, such as Ant Financial, are already using computer vision for online payment processing. Users of Ant Financial’s mobile app update documents by using computer vision, and the software recognizes and verifies the information, making decisions about their payment needs.

With improved technology and changing consumer behavior, more banks are incorporating facial recognition to verify identity. Today, most consumers no longer visit a physical branch of a bank, so facial recognition makes it easy to conduct business and move payments safely. These benefits are compelling and will continue to grow. By the year 2030, more businesses will be embracing facial recognition software. In the meantime, retailers, vendors, and banks will be able to make payments with this new technology.

Online and mobile banking adoption among US consumers

Banks are using AI to better understand and respond to the needs of consumers. This is especially important because of the increasing competition among banks from tech companies that provide payment systems. Goldman Sachs, for example, recently invested $15 million in Kensho, an AI platform that enables banks to analyze questions quickly. In the past, bankers had to spend a long time researching answers to questions and this platform has given them an edge by providing instant analytics.

For banks and credit unions, adopting these technologies can help improve their customer service and speed up the payments process. In addition to adopting new business models and processes, banks should ensure their systems are set up to take advantage of AI.

Cost of implementing AI in payment processing

In the United States, the biggest group of potential addressable consumers are millennials and Gen Zers, and these groups are driving financial institutions to increase AI and IT budgets. While millennials are likely to use digital channels to access their bank accounts, 78% of them never go to branches. Using AI to improve these channels will help banks evolve and improve their customer experiences.

Adding AI to your payment processing processes can reduce risk while enhancing customer service. In the past, payment processing was risky because of biometrics, which are easily compromised. AI can help payment gateways identify the normal behavior of their customers and make their transactions safe. It can also help them reach new customers, as AI can predict customer preferences and streamline the payment process. Chatbots are already common in banking. They can help minimize long queues and improve customer service.

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