No industry knows more about the impact of artificial intelligence than the payment industry. In a survey conducted by British consultancy Consultancy.uk in 2017, payment technology companies are most likely to use artificial intelligence technology in their businesses among all the banking institutions surveyed.
For a long time, "artificial intelligence" is a ubiquitous term in the era of rapid innovation of our technology. However, for the payment technology industry, the term means an advanced analytics technology that has the potential to improve the payment ecosystem of banks, payment processors, merchants and consumers.
In fact, according to research firm IDC, financial services companies will spend $11 billion in 2020 for artificial intelligence, which is more than any other industry investment. There must be more.
PwC estimates,These companies will also bring considerable returns to their investments. In North America alone, artificial intelligence is expected to increase the GDP of the financial and professional services industries by 10% by 2030 due to increased productivity and consumption.
No industry knows more about the impact of artificial intelligence than the payment industry. In a survey conducted by British consultancy Consultancy.uk in 2017, payment technology companies are most likely to use artificial intelligence technology in their businesses among all the banking institutions surveyed. 84% of respondents in the payment department reported using artificial intelligence in 2017, which is nearly 20% higher than IT in the second most popular industry and 44% higher than the third hot industry in finance and accounting.
From payment companies and technology companies to banks, retailers, etc., the growth potential of this industry is staggering. The global artificial intelligence market is expected to achieve a year-on-year growth of more than 150% and will continue to grow, with an estimated 127% by 2025.
People have such high expectations for payment technology and technology in many other industries, so what is the practical significance of artificial intelligence for consumers and businesses? Payment technology What types of issues do companies and financial institutions want to solve by deploying artificial intelligence and other similar technologies?
Smartly combat fraud
The eternal struggle of the payment industry is to protect its ecosystem from the criminals who attempt to make economic losses through allegations of theft and fraud. No industry is more likely than a payment company to win this fight.
According to Juniper Networks research data, the payment industry will invest more in advanced fraud detection and prevention technologies in the coming years. After all, if a consumer becomes a victim of fraud through electronic payments, the payment company may be liable.Therefore, they need to be proactive and vigilant in combating fraud to reduce losses, which is in the best interests of their industry.
Based on data from global payment technology provider Visa, after the launch of EMV cards (known as "chip cards"), counterfeit card fraud in physical retail stores Behavior has fallen by 80%, and the overall amount of global card payment fraud has also declined in 2018 compared to 2017.
Despite this, as people’s retail experience shifts to e-commerce (that is, environments that no longer use physical cards), combating fraud becomes more complicated, fraudsters The development trend is more obvious. Card fraud increased by 41% year-on-year between 2015 and 2018, from 27% in 2015 to 76% in 2018. In contrast, credit card fraud cases accounted for only 19% in 2018, down from 70% in 2015.
Artificial intelligence and machine learning are quickly becoming an effective tool for payment companies and financial institutions to reduce fraud in all environments, especially in protecting e-commerce transactions.
With machine learning algorithms, payment companies can analyze more data in innovative ways to identify fraudulent activities. Each consumer transaction contains a large amount of data, through artificial intelligence and machine learning, the payment company can Quickly and efficiently search for data that exceeds standard time, speed, and quantity. For example, artificial intelligence can begin to consider a comprehensive grid of multi-factor logistic regressions to create new dynamic weights for each data point when considering transactions.
The most important thing is that the system can learn from each transaction, continuously improve and become more effective - this is the unique ability of machine learning and artificial intelligence In short, using artificial intelligence allows payment companies to view transaction data in new, more efficient ways, increase the number of successful legitimate transactions, and reduce the number of illegal transactions.
According to Juniper Networks research data, complex anti-fraud and detection technologies supported by artificial intelligence, as credit card fraud poses a $130 billion threat It will become a growing investment area for payment companies.
In addition, artificial intelligence and machine learning technologies have better applications in the insurance field. Mobile payments, cashless checkouts, and value-added solutions are some of the best effective measures for paying companies in the industry.
Artificial intelligence can help paying companies cover their customers by creating an adaptive, real-time life that is tuned to each refund and fraud instance. Not only does this create a safer ecosystem, it also helps pay companies protect themselves from fraudulent merchants, something that manual review can't do.
In the hands of insurers in the payment industry,Artificial intelligence and machine learning can be very useful tools to combat fraud. This is the focus of payment professionals.
Most importantly, the artificial intelligence solution for fraud is located at the back end of the payment business, so the payment experience is for customers in the payment industry (consumers and businesses) Said to become accessible, convenient and safer.
Providing better and cheaper customer service
One of the biggest areas in which artificial intelligence can be improved may be the customer experience of paying companies and financial institutions.
Artisanal intelligence programs that chat bots can use to communicate using natural language processing techniques. Used in customer-facing settings, these programs are likely to provide customized and personalized services in a highly automated, highly scalable manner that disrupts many service industries.
Based on Juniper Networks research, if you apply chatbot technology to a customer-facing environment (such as customer service and dispute resolution), you will save the bank tens of Operating costs of hundreds of millions of dollars and hundreds of millions of working hours. Research shows that by 2023, the global figure is $7.3 billion, up from $209 million in 2019, and will save 862 million man-hours.
For payment technology companies and financial institutions, artificial intelligence will soon become a merchant customer who solves the refund and helps them, and is very cost-effective A valuable tool to simplify the merchant entry process.
Promoting digital transformation
As in many industries, paying The technology ecosystem has also been fundamentally affected by the continued digital transformation of the economy.As financial services and retail industries increasingly enter digital environments such as mobile payments, voice commerce, and online banking, artificial intelligence will become an important tool for driving digital interactions among consumers.
Consider that most smartphones currently sold in the United States are equipped with virtual assistants supported by artificial intelligence. Smartphones have become a ubiquitous point of contact for many elements of consumer life, including personal finance. According to J.D. Power's survey, with the proliferation of mobile banking applications, hundreds of millions of consumers are transferring payments and online banking to smartphones.
The application of artificial intelligence in these mobile banking settings is well suited as a driver for digital banking convenience. Juniper Networks' research on chat bots found that the main channel for chat bot integration would be mobile banking, which accounted for 79% of successful integration in 2023. The use of chat bot technology in settings including mobile banking applications will increase bank chat robot interaction by 3150% between 2019 and 2023.
Take the "Erica" Assistant of Bank of America as an example. According to Ameri's Banker survey, this virtual assistant served 1 million users in just three months after its launch in the summer of 2018. Because it effectively uses artificial intelligence technology, users who use their applications can easily browse their transactions, manage personal finances, and use voice commands for customer service queries, so it is very popular. This feature puts banks in the same technical arena as many disruptive financial technology companies or “challenger banks”. In the end, it drives the digital transformation of the entire ecosystem.
At the same time, consider that more and more homes are equipped with smart speakers or other artificial intelligence auxiliary power supply devices. According to Socrates Technologies (Socra), one-third of voice-activated smart device users have purchased and used voice-activated devices.
According to industry estimates, voice commerce is expected to grow at double-digit rates in the near future. Then, artificial intelligence opens up a new commercial channel—paying companies can use this channel to create more digital touch points for consumers to make purchases easier and safer.
Finally, artificial intelligence can drive digital transformation to businesses of all sizes by taking payment data to the next level. For example, machine learning algorithms can analyze transaction data to find patterns. For example, analyze seasonal declines in revenue and help business owners plan and compensate. In addition, they can provide targeted marketing features such as rewards programs and analytics dashboards to help business owners manage their inventory, capture new sales, and optimize their business for each consumer.
Overall, artificial intelligence is a valuable tool for delivering more powerful payment products that drive consumers and businesses to more digital business opportunities. And most importantly,By creating a safer ecosystem, there will be more hope for payment technology companies.