What kind of roll does Artificial Intelligence (AI) play in your everyday life? Does AI really have any affect on us yet? We are actually exposed to artificial intelligence everyday without really thinking about it. Most people think of Artificial Intelligence, if they even think about it at all, as something that only exists in some Sci-Fi future. But, the truth is that AI is being used every day, all around us, in ways we don’t see and in ways we are well aware of but just didn’t realize it was actually “Artificial Intelligence”. We speak to “Siri” or “Alexa” without really thinking about the fact that we are using a form of AI called Natural Language Processing (NLP). A form of artificial intelligence is what allows our smart phones to read our fingerprint when we want to unlock them. Who drives self-driving cars?
There is no argument that advances in Artificial Intelligence technology is the hottest new investment opportunity. $5.021 billion in venture capital went into the AI sector in 2016 and it’s on par to be as much as $9.5 billion for 2017.
Some of the ways we are already using AI in our everyday business processes are benefiting business procudures, how we attack security issues and consumer buying experiences.
Many of the “new” practices we use today that we believe are just there to make our lives more convenient are actually employing artificial intelligence to enable the whole process. AI bots combine machine learning algorithms with NLP to enable consumers to make in-app purchases, person to person payments or transfer payments via a text message.
VR or vision recognition is the type of AI technology that Apple Pay uses in order to enable it’s users to make mobile payments with fingerprint authentication. Others might use the phone’s camera at the point of sale to ensure the credit card being used is real. MasterCard’s “SelfiePay” uses face and voice recognition to authenticate the payment for their customers before a payment is authorized. This type of authentication helps to protect companies by significantly lowering their chargeback ratios.
Businesses are also using AI to streamline customer service and increase sales.
Consider chatbots, for instance. Millions of consumers utilize them everyday to help with problems with a product, answer questions regarding products or services and direct them to the appropriate department. In this way chatbots are able to handle many of the elementary needs of customers freeing up customer services representatives time so they can be more available to customers with more difficult issues.
This is just one way businesses are currently using AI but there are many more valuable uses for AI in financial services than chatbots.
Artificial Intelligence is already helping financial institutions streamline compliance and anti-money laundering processes while also helping to reduce costs. The AI is able to use things like geolocation along with device fingerprinting and proxy filtering to help recognize potential high risk transactions lowering the incidence of fraud while also making the whole payment process more streamlined for customers.
Payments providers are currently using sophisticated AI in their security protocols. AI plays a very important role in how we exchange payments, the processes used in fraud protection as well as how we service our customers.
High risk merchant services, for instance, is an industry ripe to thrive on the use of AI tools, and their high risk customers will benefit along with them. High risk merchant processing is plagued with larger than normal levels of chargeback and a high potential for fraud. High risk processors are adopting AI solutions to help them reduce fraud and chargeback while also improving the customer experience.
A process referred to as machine learning or adaptive learning is pivotal in helping the high risk industry reduce fraud. Machine learning is a type of AI used in credit card transaction monitoring. Software is built to analyze large amounts of data at one time allowing it to detect specific patterns that indicate fraud through the use of learning algorithms.
But machine learning is also used to monitor your habits, or buying behavior as they call it.
This type of AI creates massive potential for business owners to leverage data to create better, more targeted customer service. This potential comes from AI’s ability to use learning algorithms along with predictive analytics to both mine large amounts of data as well as learn from that data. The ability of these algorithms to learn from the data they are analyzing enables them to evolve based on changes in that data. This empowers it to predict customer behavior and ultimately focus products and services specific to each customer based on their purchasing behavior.
Businesses can then use these analytics to help them create more targeted offers or push certain products. Developers would be able to use the data to help them achieve better market insights for product and brand development.
The more a company can learn about their customers habits the more ways they can monetize that information.
AI along with the connectivity of the internet of things has the potential to completely change the way consumers buy as well as the way merchants interact with their customers. People are constantly talking about mobile payments but we are quickly entering an age where we are using payments in multiple environments, not just on smart phones, but in smart homes. With so many transactions happening automatically and behind the scenes businesses are going to have to find ways to connect to the consumer and build trust in the process so they will feel comfortable.
We already have items such as Amazon Echo that we can ask to order something from Amazon or tell Alexa to order a pizza. We have cars that are connected to the internet that could potentially let you purchase your gas through the dash of the car from the driver’s seat, Samsung wifi enabled fridge lets you order your groceries when they are getting low.
A washing machine that orders and pays for laundry detergent as soon as it detects the product is getting low could soon be on the market. These are all things that are viable now and will enter the majority of households in the not so far future and merchants will need to pay attention to how these affect their overall relationship with the consumer.
But what about AI going beyond the household, to the outside lives of consumers?
With advancements being made in both artificial intelligence and the payments industry there are opportunities for a more seamless buying experience even in brick and mortar retail spaces. Why would a consumer have to stand in a long line just to pay for their items when they could just pay on their device and go? What if they were able to add things to their digital cart as they pick them out in the store, then pay and walk out? These are very real applications that are already being developed by leaders in the payments industry to create a seamless buying experience.
Security is an obvious concern when it comes to so many different devices being connected to the internet, and ultimately to each other, and equipped with everyone’s payment credentials. You can’t talk about all of this connectivity and payments without considering how AI technology is making these transactions safe and secure for both the merchants and their customers. The user must be made to feel comfortable with the use of these product or what is the use of pursuing these types of technology.
AI will soon be what defines the customer experience.
More and more we are witnessing the merging of the online world with the offline, near real-time payments couple with more efficient retail experiences and flexible payment options to show how AI technology is already not only playing an important part in enhancing the shopping and buying experiences of consumers, but also becoming commonplace within our daily lives. Competition is a fact of commerce businesses are all too well aware of and the separating factor just might be the potential AI gives a company to make sure it continues evolving with the times.
Businesses that want to succeed as we assimilate a more automated environment will be open to adopting the most progressive AI solutions for their business or risk being left in the dust by their competitors. At Bankcard Brokers our philosophy is simple: Stay on top of the industry with the most advanced technology on the market, utilize our expertise to provide our customers with best service and products to help their business succeed, because we know that only through their success will we find success.