The findings reveal more than eight in 10 respondents plan to deploy generative AI in support of their payments businesses in the next two years, using it — among other things — to address the fraud and customer experience hurdles facing the industry.
Arizent, the parent company of American Banker, an information resource serving senior executives in financial services, publishes the Emerging Payments Technology 2024 report. Sponsored by i2c, the research reveals that more than eight in 10 respondents plan to deploy generative AI in support of their payments businesses in the next two years.
When it comes to using generative AI in payments operations, fraud and risk management and customer service are at the top of the agenda. Functions like compliance, loan processing and underwriting are also on the list of current and future applications.
The research also indicates that the mobile channel has become so important to the payments business that it is driving interest in new mobile wallets and affecting how new payment products are designed. More than half of financial institutions are designing new products with a mobile-first approach, making it a best practice.
Regardless of channel, organizations are looking for speed in their payments services. Driving this need for speed is customer experience (CX): More than nine in 10 (95%) respondents say faster payments are important for delivering on their desired customer experiences. Beyond improving CX, institutions are looking to faster payments technology to drive acquisition, retention and stay competitive.
Even with a clear desire for faster payments, respondents express concerns that more speed results in more fraud, which is perceived as the biggest obstacle to growth. About nine in 10 (91%) respondents are concerned that faster payments solutions make it easier for criminals to commit fraud.
“Financial institutions need to carefully monitor and balance the need for fraud and risk mitigation with advances in customer experience, as new technologies like faster, mobile payments solutions become new threat vectors,” says Janet King, Vice President of Arizent Research. “The ease of making faster payments, especially from mobile devices, raises industry concern about the security of these transactions.”
Additionally, more than nine in 10 (93%) respondents predict that their payments businesses will grow in 2024, with two-thirds (65%) expecting moderate to significant growth. As a result, three quarters expect to increase their investments in technology in the coming year.
“Now is the time to learn how generative AI-based tools can offer an advantage when it comes to fighting fraud,” King continues. “In addition, AI offers promising pathways to better customer service and marketing that banks and credit unions shouldn’t ignore.”
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