Nowadays, merchants and financial institutions alike face the need to address bigger audiences, process larger payment volumes, and scale efficiently. Thus, software that tackles FinTech-related challenges is in high demand.
Artificial intelligence (AI) and machine learning (ML) solutions are among the most progressive and fast-developing ones in the field, leading on FinTech trends lists for multiple years in a row. Read on to learn how AI-based tech innovation is shaping the modern payment industry and catering to the needs of modern organizations and businesses.
The boom of online payments accelerated by the global pandemic as well as the ever-growing competition for customer engagement and loyalty drive companies to seek advanced payment solutions. According to the latest Global FinTech Adoption Index report, 25% of small & medium businesses worldwide readily accept tech innovation in the banking, financing, and financial management spheres.
That’s where AI steps in. This revolutionary technology is predicted to transform the business landscape over the next decade. Already now, AI-based solutions perform tasks that previously required human intelligence and are defining how businesses promote their products and services, interact with clients, process payments, and detect potential fraud.
The adoption of AI software solutions for payment optimization is flourishing now more than ever. Here are some of its common use cases:
1. Virtual Agents
AI-powered digital assistants that make the organizations’ automated communication “come alive” are gaining popularity among financial institutions.
DBS Bank is one example of the implementation of such technology. This Singapore-based bank uses KAI, a digital experience platform developed by Kasisto, trained to emulate expert employees.
KAI virtual agents host human-like conversations, matching and even exceeding live agent performance, being available round the clock across all channels. This tech solution is at work in some of the world’s biggest financial institutions, optimized to field millions of phrases with speed and accuracy.
Such software helps companies boost consumer experience, promote products and services, and reduce operational expenses.
2. Fraud Detection
Fraudulent mechanisms are continuously advancing, so companies require progressive detection methods to battle them effectively. AI tools have proven themselves to be extremely effective in this role.
Visa is a great example of using AI solutions to tackle the cyber fraud issue. In fact, the payment industry giant has been implementing artificial intelligence for fraud detection and payment authorization since 1993.
All this time, the Visa Advanced Authorization (VAA) software has been analyzing user behavior and determining patterns in it. This allows it to accurately select suspicious activity from non-fraudulent transactions, flag it, and report the problem to the issuing bank.
Some chatbots are rule-based and can only deal with predefined, simple requests. However, AI-powered chatbots are much more advanced and can conduct conversations with the customers, respond to complex queries, and carry out tasks like canceling a standing order or providing information on a transaction a client doesn’t recognize.
PayPal, for instance, uses smart AI chatbots to respond to customer queries and prevent their customer service centers from overloading. In addition, the payment industry giant also uses ML and AI to detect and prevent fraud.
As you can see, AI isn't limited to just one single type of software - it’s a versatile technology with unlimited potential to automate workflows and quickly analyze large volumes of data. Its implementation in the payment industry is still fairly recent, and we are sure to see impressive advancements in the near future.
Already now, AI is rapidly evolving in the following FinTech-related directions:
The list goes on!
At Payneteasy, we know that timely innovation is key to staying ahead of the competition, so we actively implement the latest tech into our solutions. Check out our advanced and comprehensive solutions that can be customized to fit your specific needs and requests!