All financial industry analysts agree that the number of transactions paid using credit and debit cards will continue to grow annually. Moreover, this trend is bound to continue given the planned introduction of the new Apple Card, which is expected to become an instant hit with Millennial’s, especially those who currently do not have a credit card.
Banks that process credit and debit card transactions, therefore, constantly must be on the lookout for new technologies that can handle all this new data traffic quickly and dependably.
By every indication, they’ve found it. It’s artificial intelligence (AI). AI is quickly becoming central to emerging bank technologies. And that is because AI is the most appropriate mechanism available to quickly spot transactions trends and customer behavior.
PaymentsJournal reports, for example, that Visa is already using AI to prevent an estimated $25 billion annually in credit and debit card fraud. Visa Advanced Authorization (VAA), a comprehensive risk management tool, employs AI to evaluate every Visa transaction, allowing issuing banks to identify fraud early enough to prevent it from spreading while allowing legitimate transactions to proceed unimpeded.
Fraud detection is only the beginning. As credit and debit card use continues to expand, so will the number of disputes that issuing banks have to process. And that will be a challenge, since until now dispute processing has been primarily a manual procedure. That sounds remarkable, and it is. Banks, after all, were one of the first institutions to automate after silicon was invented. Dispute processing was unaffected because there was virtually no way to automate it.
Now there is. AI will, of course, significantly reduce bank operating expenses, just like all other types of automation do. But for the credit card holder, what’s most important is that it will dramatically improve service and, in turn, increase customer satisfaction.
Aaron Lazor Pioneering International Entrepreneur and Financial Service Industry Visionary