Fran Duggan
Fran Duggan Feb 1, 2018

AI, as in actionable insights: The future of artificial intelligence in payments

A new era in technology driven by the “Do it for Me” phenomenon is blossoming all around us—and “driven” can be taken literally, what with the advent of self-driving cars. Add to the list self-setting thermostats, self-driven vacuums, robo-investors, digital personal assistants: automation services powered by advances in machine learning, AI (artificial intelligence) and biometrics. Financial services and specifically payments now stand fixed in the revolution’s crosshairs, with the potential benefit of a customized, simpler, smarter experience.

By adopting AI, financial institutions can transform their industry to create one-on-one private banking experiences for everyday consumers. Yet despite ample data, banks have lacked the know-how and technology to put it to good use for consumers. The future payments industry will apply AI to solve this problem and add value to consumers’ everyday lives, even as AI puts banks back in the center of their financial lives.

Yet there is also the customer relationship dimension, especially as it relates to payments user experiences. AI will allow for greater efficiencies and faster processing, along with increased transaction accuracy. But the real value will lie in delivering a “Do it for Me” payment and money management experience. As AI leverages data, financial institutions can provide smart insights to consumers—and better ways to manage their money. Moreover, integrating AI into payment solutions will automate processes that historically required consumers to navigate and manage complicated payment processes. Modern technologies will enable financial institutions to provide capabilities and services that add significant value for their customers.

Personalized Services for a Better User Experience

Artificial intelligence promises to help financial institutions create a more personalized, smarter user experience based on each customer’s data. This will include card spending and bill payment records (such as when regular payments occur) and matching payments to a consumer’s deposit trends (such as automatic payroll deposits) to predict behavior and intuitively manage the timing of those transactions.

What’s more, AI can better target and make intelligent suggestions to consumers open to learning about relevant products or services. Consumers don’t mind such offers, so long as they’re timely and relevant. If a customer experiences cashflow problems because of monthly or quarterly paychecks, for example, the AI engine could recommend setting up a home equity line of credit (HELOC) or savings account with auto transfers that ensure the consumer pays important bills on time and avoids future late payments.

AI-developed algorithms can also determine “psychographic” profiles through a quantitative methodology that describes consumers or their psychological attributes. This can help financial institutions determine what a customer or demographic likes and dislikes; think of Netflix suggesting movies or shows based on what you’ve previously watched. This can also color the whole payments experience and bring personalized, concierge service straight to the customer: presenting the right information at the right time to match individual needs.

Voice Interaction as the Face of A.I.

Voice recognition software has reached news level of public awareness, with virtual assistants such as Alexa, Siri and Cortana carrying out everyday activities. These assistants are getting smarter as behind-the-scenes AI integration creates conversational interactions by translating or transcribing human speech into data. Consider a finance consumer who asks a voice assistant to provide a checking account balance. The software understands the command and provides the dollar amount. It might also offer a proactive suggestion, such as transferring money to a high-interest savings account.

Smart speakers such as Amazon Echo or Google Home translate voices into digital code with Natural Language Processing (NLP)—and reply to consumers in an intelligent way that makes the conversation two-sided. Combining voice recognition with AI will allow consumers to better manage payments via real-time back and forth that activates certain services or actions. If you ask the Echo a simple question such as, “Alexa, how is my financial situation today?” Alexa can respond not only with your balances but also a list of bills coming due—and then set up payments. AI will give the masses their own personal private banker intelligent enough to make payments on the consumer’s behalf.   

A.I. will be everywhere Including Chatbots and Wearables Assistants

AI boasts myriad practical uses beyond smart alerts and voice interaction. Starbucks, Lyft, Fandango, Spotify, Whole Foods, Sephora, MasterCard, Staples, The Wall Street Journal and Pizza Hut all use various forms of chatbot technology. (Imagine an AI-driven conference chat where MasterCard pays for your pizza order and has Lyft deliver it.)

Yet with few exceptions, the financial services industry has been slow to create chatbots that act as personal financial assistants. Consumers could easily ask a chatbot to check account balances or answer challenging questions, such as “How can I better manage my cash flow?”

In like fashion, wearables technology has newly entered the financial industry with select smartwatch applications. This enables institutions to explore the practical uses of this technology; a runner could use a smartwatch to transact without a wallet on hand (or even their hands) or receive fraudulent card activity alerts. Consumers will be able to contact their banking concierge through wearables or even conduct transactions through mobile wallets.

Savvy consumers want to reduce recurring tasks and burdens through consumer technology. As society relies more on automation, customers will clamor for streamlined digital interactions. Financial institutions can now deliver solutions through artificial intelligence that meet their customers’ expectations for a better overall experience. As consumer-facing industries become more competitive and make digital experiences smarter, financial institutions must embrace artificial intelligence to keep themselves relevant. The “Do it for Me” culture demands it. In turn, banks attuned to AI will do it for them.


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Fran Duggan is CEO of Payrailz, a digital payments company offering smarter and more advanced bill payment and money transfer solutions to banks and credit unions. He is based in Hartford, Connecticut.

If you enjoyed this article, check out: AI, as in active interaction: How artificial intelligence builds customer relationships, Why artificial intelligence is BAI’s 2018 Trend of the Year and Blanket security: How AI is remaking risk management

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