Event Title: PayThink 2019
Date: September 18 – 20
Presentation Title: Artificial Intelligence and the Future of Payments – Critical Use-Cases and Trends
Team Member: Daniel Faggella, Emerj Founder and CEO
Emerj CEO Daniel Faggella presented at PayThink on some of the insights about AI for payments we learned researching our AI in Banking Vendor Scorecard and Capability Map report. Daniel used some of the data and charts from the report to paint a picture about where AI in payments is headed. He touched on three main points:
- The intersection of AI for payments can be broken down into three subcategories: (1) AI applications that access payments (chatbots voice-enabled interfaces, facial recognition) for verifying payments, (2) Core payment processes (verifying who the person is, making sure it’s not fraudulent, and sending the money from one place to the other), (3) AI applications that use payment data for marketing and customer experience applications.
- Anomaly detection for fraud purposes is where the low hanging fruit is when it comes to AI for payments because it’s an easy and direct ROI compared to other areas of AI for payments. Most of the money is in this technology, as well as most of the traction at banks.
- It’s very hard to transform the customer experience when it comes to AI for payments because the core science of natural language processing needs to evolve before this can happen. The kind of AI talent that can build a customer-facing application is very different from the kind that can understand data science as a science. it’s a unique skillset, a Silicon Valley skillset. It’s also hard to disperse that particular skillset into banks and traditional financial services firms, and so we can expect adoption to be much slower.
What We Learned
- Large financial institutions are really eager to find ways to be the first to pilot new technologies, foster partnerships with FinTechs, and make equity investments in the promise of FinTechs. They realize this is going to be the lifeblood of the future, and so finding different ways to merge the FinTech ecosystem with their own internal innovation efforts is a big emphasis they’re focused on. A lot of the innovation efforts within these banks appear to be attempts to model what successful innovation looks like in the startup world. They’re looking to be agile, and they realize part of that has to include all the ways they can mesh with FinTechs. Part of the value of these events for banks is allowing them to meet startups.
- The payments space is a huge focus for banks in general. Daniel spoke with banking leaders and AI vendors and asked why there are more events on payments than all the other banking topics combined. The answer is that a lot of the core IT infrastructure within a bank involves the same relatively limited of players. These players are not necessarily going to be fast-moving, and people aren’t looking for them to be fast-moving. Payments, on the other hand, seems to be an area that’s evolving quickly because it involves what the consumer is doing, where the consumer is sending and accepting their money, where money flow is starting to become part of this Web 2.0 net that is gobbling up our attentions. Consumers are on facebook and other messaging apps, and you can now make payments through these apps. Payments is becoming a part of our digital lives, and for that reason, banks want to stay ahead.
Header Image Credit: Cryptooof