How AI will shape the future of digital payments

On a usual day, before taking on the world, I wake up in the morning, call out to my smart speaker to hear about the breaking news, and adjust the light and temperature of my room to help me get ready. On my way to work, my Uber smart device tells me how long it would take me to reach my office. At lunch hour, I receive a personalised offer for my favourite place to eat during weekdays. Once the day is over, my digital assistant gives me step-by-step instructions on how to churn up a new dish and surprise my family. In short, without my smart devices, it would literally be impossible to multitask and live up to the demands of a hectic life.

My daily routine just goes on to show how machine learning and artificial intelligence (AI) have slowly seeped into our lives with voice recognition systems like Alexa and Siri and even AI powered cameras in smartphones that adjust themselves according to surrounding light and subject. The implication of this rapid AI adoption is significant; especially as real time digital payments continue to grow in India.

As humankind takes giant leaps in terms of technology, AI ensures machines and gadgets imitate human actions, perceive the environment around, and adjust according to a diverse set of circumstances. Many global companies are working through smart technologies like AI to directly improve the consumer experience across education, daily life, and commerce. At a time when the Indian government is pushing both the digital payments and the financial inclusion agenda, AI can and must offer some real tangible benefits like tighter security and risk management in a world that is increasingly complex and moving at the speed of light.

The Indian financial sector has been quick to realise the potential of AI in operations. Over the last few months, Indian PSU heavyweights like SBI and Bank of Baroda have invested heavily in AI platforms to improve efficiencies and offer enhanced services. SBI uses a chat assistant called SBI Intelligent Assistant (SIA), which resolves queries of NRI customers exactly like a bank representative would without the need to wait in queue for customer service. At the same time, AI systems are analysing and monitoring thousands of transactions per second and, most importantly, taking action when a risk to a consumer is identified. These early experiences with AI shape the outlook of how the future of digital payments will evolve.

1) Improved business operations and risk management: Most organisations in today’s market want to integrate artificial intelligence into their business but do not know how or where to begin. With services like Mastercard’s AI Express, companies can develop and deploy a customised artificial intelligence model that solves real business issues. The capability is built into the multi-layered security strategy of the Mastercard network that can act within a few milliseconds to detect and check fraud, prevent money laundering and predict credit risk. The multiple layers of security and data protection ensure that even if one layer is breached, the concerned banks and merchants connected to the network are immediately notified.

2) Enhancing customer experience: AI is being used to analyse consumer behaviour, recognise customer preferences, and recommend and take actions during retail interactions. For example, the start-up sector has developed innovative solutions that combine AI and Augmented Reality (AR) to help banks and retailers create novel customer experiences in branches and stores. Through computer vision, one startup has made it easier than ever to search for products online by uploading a picture of the desired merchandise and matching it to existing inventories. There are others that have created software platforms that let businesses ask predictive questions pertaining to any domain and get fast and accurate quality results. Working collaboratively with the start-ups to develop and augment solutions, everyone has the opportunity to move from merely offering a digital solution to providing a truly smarter experience.

3) Ensuring personal financial data security: With the rise in digital, real time payments through mobile phones, there is a greater need to ensure data security. For example, AI is being used to identify users by the way they hold and use their phones. If anyone else apart from the user keys in the user’s password, the AI powered platform can recognise whether the person keying in the details is the actual phone’s user. AI not just about the IoT (Internet of Things) but different devices using high-level information analytics to make predictions about behaviour.

Financial companies often use a combination of artificial intelligence for empowering the consumer journey and securing the transaction. Many financial companies are also joining hands with the local governments, banks and regulatory bodies to create an ecosystem that can prevent fraud and protect enterprises with breakthrough AI technology.

It won’t be long before AI proactively informs me about my financial health before a planned shopping spree, pays my bills and obligations automatically, and fights off attempts by others to take over my account.

The author is vice president, innovation management, Digital Payments and Labs, Asia Pacific at Mastercard