Digital transformation has encompassed all industries in recent years, especially in the financial sector. At the heart of this transformation is the rise of artificial intelligence (AI).
AI is the ability of machines to replicate human behaviours like learning and cognition. From e-mail spam filters and natural voice recognition, to online shopping recommendations, AI is shaping the world to our convenience.
Bermuda has always been a world leader in finance. Medium report that with the passing of The Digital Asset Business Act 2018, the financial technology sector is set to explode, especially in AI-powered financial services such as digital payments.
PwC Bermuda partner Matthew Clarke highlights that 90% of bank and capital markets CEOs surveyed believe that AI will significantly change finance in the next 5 years. However, the survey also found that 80% see skills shortages as a major threat in the digital transformation.
But with AI becoming a necessary skill, there’s an upsurge in interest in reskilling and learning its development. To get a sense of how dominant AI has become in the modern workforce, Udemy has over 724,000 students currently studying artificial intelligence courses on their site. The courses cover a wide scope from deep learning to how to apply AI to modern business models. This shows how prominent AI now is and how its use will only increase. So, here are 4 ways it is changing payment processing.
Safe and Convenient Payments
Improving Customer Experience
Using AI has streamlined the functionality of payment technology. As many consumers are now used to online and mobile shopping, AI increases the convenience of payment by introducing personalised banking. Chatbots are now deployed in apps and sites to accommodate queries and provide round-the-clock services
Taking Fraud Head on
In our article on ‘Brushing up on Cybersecurity’, we discussed how fraud and fraudulent transactions are huge risks for consumers and banks. Machine learning AI’s advanced pattern recognition intelligently analyses and monitors payment behaviours. Based on previous transactions, AI can flag unexpected bills or tips that are higher than usual—preventing credit card fraud. Additionally, the advent of AI platforms in risk assessment tools also cuts down the time needed to verify bank and merchant transactions.
AI and the future of Payments
Computer-vision powered payments
While facial recognition technology has been around for a while, pioneers see it as the future of digital payments. By using machine-vision AI, credit and debit card data can be stored with your facial ID—letting you pay with it. Another revolutionary application is Amazon’s Deeplens technology which enables cameras to check out your grocery items without going through a cashier. In fact, it launched its cashierless grocery store last year. While it’s still in nascent stages, it’s set to disrupt payment systems.
Biometric secured payments are now the norm as it’s integrated with most smartphones. But advanced use cases are aspiring to fully integrate AI powered smart assistants with voice-recognition technologies. With voice-activated payments, smart assistants access your accounts for the transaction. In the future, voice activated payments won’t be hinged on assistants or other biometric securities for verification.
As frictionless payment leads the way in the digital transformation of financial services, it won’t take long before these replace most of the methods still used today.
By Reina Joules