NMI’s executive team discusses AI’s impact on payments and many other predictions for 2024 in Payments 2024: NMI Executive Predictions and Insights for the Year Ahead.
Artificial intelligence (AI) is everywhere, and high-profile systems like ChatGPT are now commonplace. However, the real proliferation of AI is happening behind the scenes in various business processes, particularly security. In 2024, AI-based systems will become standard in many areas of payment processing, including customer support, risk management and fraud prevention.
AI Will Streamline Key Processes
30 percent of financial services companies already report using AI for product purposes. As generative AI becomes more advanced, innovative businesses will find new ways to use this technology.
“AI was all the talk in 2023—across every industry, including payments—and will remain a hot topic in 2024,” said NMI Chief Executive Officer Vijay Sondhi. “We’ll see AI continue to revolutionize how we shop as it engages with shoppers, tracks consumer spending behavior and ultimately contextualizes payment methods. We’ll also see the transformative power of AI harnessed to advance risk management capabilities and lean in on digital payment options like QR codes, tokenization and biometric verification to keep payment credentials more secure.”
As technology evolves, the potential applications of AI seem limitless. Today, the most prominent use cases include customer support, risk management, underwriting and fraud prevention.
Customer Support: Quality support can be the difference between a merchant staying or leaving. It’s also expensive, and companies are always looking for cheaper options. Chatbots are a fantastic supplement to traditional customer support, especially now that advances in generative AI allow them to offer practical, helpful interactions.
AI support bots don’t replace human expertise. Instead, they excel at handling simple tasks and answering basic questions. If a customer has a complex issue, the AI can quickly redirect them to the correct department. This enables payment providers to focus valuable human resources on critical, high-priority cases.
Chatbots can even help providers gather a customer’s personal and account information so support agents are better prepared for their conversation. The result is a more consultative support experience for merchants at a much lower cost.
Risk Management and Underwriting: Managing risk is necessary in payments, and AI-based tools are well suited to the job. Providers should expect accelerated adoption of AI underwriting and risk management systems that can quickly analyze vast amounts of merchant data. This function allows human underwriters to focus on decision-making rather than wasting time on menial tasks.
For merchants, AI fraud detection tools will become the standard expectation. Payment providers can offer advanced tools like Kount to meet merchant needs for tighter fraud screening.
AI Will Bolster Payment Security
The intersection between AI and fraud will power advances in the tools and techniques used by both providers and fraudsters. Generative AI makes it fast and easy for fraudsters to send out believable phishing emails, create malware, spoof banking voice authorizations and more. As a result, payments fraud and cyber attacks can be scaled up faster and more cheaply than before.
Thankfully, AI also has the potential to be a driving force in the payment industry’s fight against bad actors.
“When you build a bigger wall, they build a bigger ladder,” said NMI Chief Product Officer Tiffany Johnson. “So it’s going to be very important for merchant service providers to continue investing in security and proper protections, and those security solutions are going to increasingly rely on AI to try to stay one step ahead of a very adaptable foe.”
For more 2024 predictions from the NMI executive team, download Payments 2024: NMI Executive Predictions and Insights for the Year Ahead.
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