7 Amazing Uses of AI in the Payment Industry
Artificial Intelligence, also known as Artificial Intelligence, is well-known for streamlining processes safely. However, when it comes to digital payment solutions, AI goes beyond streamlining and providing security. AI brings automation to online payments and allows users to monitor them. It is fascinating to note seven amazing uses of AI within the payment industry.
How AI Transforms Digital Payment Industry?
1. Neural Technology Works Wonders
Although self-driving cars are not a new concept, have you ever considered that the technology behind self-driving cars could be used to fraudulently apply for loans or cards? The technology behind an autonomous car is called the Artificial Neural Network (or neural network technology). It mimics the human brain and played an important role in locating the stolen identities from the Equifax Data Breach and other incidents.
ID Analytics has created a new fraud scoring system based on convolutional neural net technology. This is an improved version of the current system that provides financial institutions with indicators to determine if the fraud attempt was made from a first- or third-party source. The neural technology creates a 3D model of the person’s data, including the address, phone number, and transaction history.
2. Bot Attacks become Reality
With each passing day, the Fintech industry is more dependent upon AI technology. The AI technology is gaining popularity among entrepreneurs, whether we are talking about enterprise-oriented banking apps such as Wave and Chime or AI-based chatbots which allow users to receive personalized notifications regarding spending and investments.
We are now pointing to the negative side of machine learning, AI bots. Online fraudsters use AI-powered bots to commit fraud. This is a problem for many industries, including the travel industry. The holiday season is a prime time for fraudsters to attempt online and offline attacks on the tourism or travel industry. Due to the rise in travel volume, many criminals seek to profit from the situation.
Cybercriminals often use bots to book seats on flights, causing a wrongful rise in the prices of unsold seats. Fraudulent bot use has caused many problems for tour operators and travelers.
3. Payments and Social Media Fusion
Let’s look at the negative side of AI and then let’s see what exciting opportunities there are for a digital payments solution. It’s a fusion between social media and payments. Facebook, Alibaba, as well as many other companies, have made the most out of this fusion by offering payment solutions via messenger apps. Amazon is now working on any time, a messaging platform.
It is likely that “conversational commerce”, as it is known, will grow in both the eCommerce and fintech sectors over the coming years. Conversational commerce is a growing trend that will soon be widely adopted by people around the globe. Chris Messina predicted the bright future for conversational commerce in 2016 already. Chat, messaging, and voice will all be used by consumers to make online transactions. This will be possible thanks to AI technology.
The lines between a human agent and a computer robot will blur in the near future as users won’t be able to tell the difference thanks to AI technology.
4. AI Bots on Facebook Messenger
Banks and financial institutions have been gradually deploying AI-based chatbots on Facebook Messenger to process payments and provide personalized customer service. American Express (AmEx), one of these companies, has a chatbot on Messenger that sends out transaction notifications and reminds users about benefits. The chatbot receives notifications about transactions every time a user purchases anything.
AmEx chatbot also allows users to add a credit card and link an AmEx account with their Facebook account. To make it easier to use the social network, the card’s credentials will be stored with the user’s Facebook account. In the future, we will have smarter and more powerful AI bots that can perform different tasks via Facebook Messenger and other social media channels. The presence of AI bots will increase conversational commerce.
5. AI to Make Users Financially Healthy
This is one of the greatest benefits of AI. Douugh, a fintech startup, has created an AI-based virtual assistant that can help consumers recover their financial health. Douugh named Sophie to help consumers reduce student loan debt and credit card debt, while also allowing them to make better savings choices. The virtual assistant can also run diagnostics on customers’ financial status and help them manage their spending goals. It can also handle payment-related tasks such as bill payment and tracking payments. Douugh has taken a huge step towards offering smart bank accounts to its customers.
AI technology can be used to predict the customer’s behavior and analyze it. It is used in fintech to analyze customer spending patterns and save habits. It can be used to help customers maintain a delicate balance between loan and deposit, while also making them financially sound. Many fintech companies, as well as the BFSI sector in general, will use AI technology to offer 360-degree financial solutions.
6. Bot Turns Banker
DBS, Singapore’s largest bank, has used conversational AI to improve its customer service. This allows the bank to manage customers’ accounts and allow them to initiate payment. Customers don’t realize they are speaking to a bot, but a bank representative.
Kai, DBS’ AI-powered bot, can do more for customers than agents in customer service. Kai answers customers’ questions immediately, even if they ask about their grocery bill last month. While agents may take some time to obtain the information, Kai provides the right answers.
In the next few years, many other banks will also develop reliable and robust bots. These bots will ease the banker’s pressure and provide improved customer services 24 hours a day.
7. AI Makes Stores Intelligent
It is time to transform brick-and-mortar shops’ ceilings and walls. This futuristic approach has been implemented by Shanghai’s self-driving supermarket Moby. The supermarket “recognizes” customers via a mobile app. The store has a solar-powered generator and a holographic greeter.
Although this concept is still in its infancy, it has many potential uses and offers retailers many opportunities. The store tried this concept in Shanghai because it wanted to keep a retail presence in areas that don’t have the resources for a permanent grocery shop. Although the AI technology handles customer service and delivery, the store still requires human assistance to return unsold items to a warehouse.
Amazon Go is an efficient example of a concept shop. Instead of using holographic greeters, sensors are installed throughout the store. The sensors can detect which customers are buying and what payment method they use. AI-based sensors collect and analyze data about user behavior.
AI is the future of digital payments. We will see innovative and creative applications of AI technology as technology becomes mainstreamed in this sector.