Once a concept of science fiction movies set in a long-distant future, artificial intelligence has now entered reality. What’s more, the technology is even more powerful than anyone could have ever imagined. Indeed, according to Eric Schmidt, “AI will be the most transformative technology since electricity.”
AI is being used to enhance countless industries, and it is already playing a role in the financial world. It is boosting online transactions with improved security and customer experience and will help push the sector forward in the next stages of its evolution.
The Rise of AI in Various Industries
Unlike other revolutionaries such as cryptocurrency, which have struggled to attract mainstream adoption, AI has swiftly cemented its place in the mainstream. A recent survey from Pew Research found that a whopping 55 percent of Americans already use AI, with many of these people using it in the workplace as well. This highlights how there’s already a lot of trust in the technology, but also that it has enjoyed seamless integration into everyday life.
There are countless industries that have seen a huge rise in AI usage over the last few years, from healthcare to ecommerce. In the former, the technology is reshaping diagnostic support for greater accuracy, and in the latter, it’s bringing about greater targeting and marketing. There has already been a lot of AI adoption across the financial services sector, and the banking industry is expected to increase revenue by up to $1 billion before 2027, according to a report from Demandsage.
The amazing thing about AI is that it has an exponential number of applications, meaning it can be used to streamline and improve different aspects of any business. Regarding online transactions, there are a couple of key ways that AI is beginning to have a positive impact.
Improving Security
Security is of paramount importance to payment processing platforms, and they should always be upgrading with the latest technology to ensure the utmost safety possible. AI is a gamechanger in various aspects of security, and the payment systems that incorporate it first are going to get ahead. That’s because banks and other companies that need payment processing systems only want to work with the most reputable and safest ones.
Businesses are looking for platforms that come with secure payments and fraud protection, with options like Airwallex payment systems up there with the top seven services in 2024. It provides a payment gateway, processor, and business accounts all in one platform, and is one of the many of its kind that’s seeking to integrate AI to make major improvements.
One of the best uses of AI in the financial sector is in fraud detection and prevention. Barclays has been one of the early pioneers of AI in finance, and the famous bank uses it for real-time monitoring of payment transactions to predict and prevent fraud. In the past, fraud detection systems had typically relied on static rules and often failed to adapt to evolving threats. AI-based systems are highly adaptable and can learn to analyze transaction patterns to detect anomalies in real time.
There are various other ways that AI can enhance security, with behavioral biometrics being an interesting new area to examine. It’s now possible to compile data about the way users interact with payment platforms, such as their typing speed and mouse movements. This can then be used to identify unusual patterns and predict instances of malpractice. AI systems are constantly learning, meaning that they can improve their detection capabilities over time.
Authentication on payment platforms will become much more secure with AI’s help as well, with biometric verification likely to be the sole form of signing into apps in the future. The widespread elimination of passwords and other forms of logging in will make it harder for cybercriminals to find a weak spot. With all these excellent AI upgrades, the technology can help reduce instances of cybercrime and build trust.
Streamlining Customer Experience
The other key use case of AI in every industry that it has permeated has been in improving the user experience. One notable AI upgrade in the financial industry is that it can carry out routine tasks, meaning that human employees are available to focus on more complex customer needs.
A great example of this is how money managers at Morgan Stanley no longer spend hours writing up notes from their endless Zoom calls with clients. Instead, they put AI to good use and automate the process of emails and summaries of discussions. The AI assistant is known as Debrief, and it takes care of the laborious notetaking that managers deemed the most thankless aspect of their jobs in the past. This upgrade saves advisors up to 30 minutes per meeting and can help them put greater emphasis on customers’ needs.
Personalization is one of the main things that all online businesses are striving to achieve, and AI is helping with this. Chatbots have had a huge impact on websites, and AI is making these more efficient than ever before. They can now answer a much greater range of questions and provide customers with bespoke interactions. These chatbots are helping boost online sales, and are useful for payment systems where customers need to know that they can easily contact support if they need to.
When signing up to a payment platform, AI can handle the customer onboarding process and verify documents. This can reduce the amount of time needed for new customers to open accounts. It can also handle various other important actions such as processing chargebacks and setting up recurring payments. The more operations like these that are handled by AI, the lower the likelihood of errors.
The Future of AI in Online Transactions
These impressive developments with the integration of AI in online payment platforms are just the tip of the iceberg. The notable thing about this technology is that it is constantly learning and improving, so once it’s set to work, it will continue the evolution of whatever platform it is in.
One of the greatest metrics of AI’s impact will be in productivity enhancement. Goldman Sachs has already predicted that the technology could boost coding productivity by up to 30 percent. This will come in the form of debugging code, generating solutions, and accelerating project timelines. AI-powered tools such as GitHub Copilot are leading the way with this.
Process automation is another key area that is set to improve rapidly now that AI has come in to shake things up. The technology is already taking care of repetitive operations at banks including verification of accounts, but in the future, this is expected to be an instant procedure.
The overall impact of AI will be visible in revenue growth, with the potential for at least a six percent increase in income over the next three years. Some of the key drivers in this include the reduced operational costs with AI taking over from humans with many tasks. The technology is also set to improve customer retention, thanks to the streamlined experience it can offer.
Online transactions are set to enter a new age in their evolution with AI on board. The incredible changes that have already come about are just the beginning, and as the AI learns more about the financial sector, it is likely to bring in its own innovations.
