The Payment Association has forcasted that market for Artificial Intelligence (AI) will reach a whopping $360.36billon by the year 2028, as 54 percent of financial services organisations with over 5,000 employees have adopted AI.
In a research titled ‘Using AI Intelligently: Smart way to use Artificial Intelligence in Payments’, Payment Association also revealed that 70 percent of all financial services firms are using machine learning to predict cash flow events, fine tune credit scores and detect fraud.
According to the research, both AI and machine Learning allow companies to scale processes faster than human beings, process data far more efficiently than current decision-making programs and, most importantly, can find patterns and make inferences.
“At a time when financial technology (FinTech) companies are working to make their products more personal while also making them efficient and seamless – as 92% of consumers expect a fast, frictionless experience while also getting one that is as trustworthy and secure as possible,” it noted.
AI offers a way to combine the best elements of human operators and traditional digital automation. The efficiency savings are potentially astronomical, but more important is the ability of AI to improve itself in real time by analysing results and spotting patterns. Use cases for AI range from giving more accurate credit scores to document processing and anti-fraud applications.
The research shows how interest and uptake in AI was slow but steady pre-COVID, but following the pandemic interest increased dramatically as financial organisations sought ways to become more efficient. This in turn caused a rise in regulatory interest in AI to mitigate risks relating to privacy, unlawful discrimination, and security. Venture capital has also flowed into the industry, with AI-orientated start-ups in the finance and insurance industry being the seventh largest sector for investors.
Commenting, Tony Craddock, Director General at The Payments Association, said: “We knew that AI was transforming the payments industry, but from talking to figures within the industry about their own experience with AI we have seen that they are moving from using AI in distinct siloed processes to having it be a core technology driving their business. By giving AI technology ‘oversight’ over different processes companies are creating datasets that allow AI to make predictions and improve processes.”
He added that AI systems can see a holistic picture of who a person is and make a much more nuanced decision, which will open up financial options to people who would otherwise have been excluded. Much of this is enabled by Open Banking, which explains why so many innovations in payments are interdependent.