|With AI and machine learning, Fintech makes mobile payments more secure. / Photo by: Paisit Teeraphatsakool via Shutterstock|
The financial industry has been collecting tons of data that is now waiting to be utilized to its full capability. Artificial intelligence can make this possible. It can process big data and deliver insights. With AI and machine learning, Fintech makes mobile payments more secure while meeting consumer expectations for frictionless payment experiences.
Reports showed that global mobile wallet spending grew by more than 30 percent in 2017 to $1.35 trillion. The figure increased by $4.3 trillion in 2018 and is projected to expand to nearly $14 trillion by 2020. Several countries have also adopted many payment apps. Payments Cards and Mobile, an established and award-winning hub for global payments news, research and consulting, reported that China has 47 percent of phone owners who are using mobile wallets. The two dominant payment platforms in the country are WeChat pay and Alipay, which have the highest GDP. This makes China’s market share all the more valuable.
China is followed by Norway. The country’s mobile wallet usage, which is at 42 percent, is proportionally higher than any other European nation. Next is the UK with 24 percent of phone owners using payment apps, and then Japan with an estimated one-fifth of smartphone owners using digital wallets, and finally Australia with 19 percent using mobile wallets.
The report also showed the 2017 global usage of mobile wallets. The mobile payment platform that garnered the most users was WeChat Pay (600 million), followed by Alipay (400 million), Paypal (210 million), Apple Pay (87 million), Samsung Pay (34 million), Amazon Pay (33 million), Chase Pay (28 million), and Android Pay (24 million).
Finextra, the leading independent newswire and information source for the worldwide financial technology community, said that Near Field Communication (NFC) is the single biggest reason for the adoption and rise of mobile wallets across the world. Customers don’t need to give their physical cards to cashiers or reveal their card information online because NFC can instantaneously transfer funds and confirm transactions.
Improving Efficiency in Mobile Payments
Today’s fast-paced world is keeping people busier than ever, which is why more and more are turning to technology solutions to simplify their daily lives. Consumers nowadays are demanding companies to automate and make managing their finances easier, faster, and more efficient. Through AI and machine learning, businesses can meet real consumer demand while banks can deliver a smarter and more engaging user experience—one that users will value and make use of.
Business 2 Community, a business community website, reported that AI-powered chatbots are helping customer service representatives in answering consumers’ queries. AI can help in reducing processing times for payments, eliminating human error, and accomplishing tasks faster and more accurately than human workers. This is particularly a great help for businesses that need to process large amounts of data every day. The process of generating financial reports and satisfying regulatory and compliance requirements is too much to bear for employees. While AI greatly improves efficiency, it also simultaneously gathers important user insights.
Machine learning also helps in speeding up the processes of authorization of transactions and monitoring. It can analyze huge amounts of data to profile consumers and guess their product needs. In this way, companies can offer new opportunities for upselling. Machine learning can also identify the customers who are more likely to drop out, which the businesses can address immediately. It can help in automating many customer service interactions. Along with natural language processing, cognitive engines, and deep insights, machine learning can drastically improve mobile payment platforms.
According to InstaPay, an online site that features highlights, features, interviews, show reports, blogs, and instant payment-related information, AI and machine learning can be used to analyze spending patterns, automate payment plans, offer recommendations, and better manage the payment of bills. For instance, users are provided with smart recommendations based on their behavior, offering a breakdown of monthly expenses and suggesting savings programs with higher interest rates.
|AI can help in reducing processing times for payments, eliminating human error. / Photo by: metamorworks via Shutterstock|
AI and machine learning play a critical role in modern fraud detection, which goes beyond traditional financial fraud detection. Fintech has been suffering from fraud-related losses for the past years. With machine learning algorithms, banks and businesses can constantly evaluate huge amounts of data on company stocks, loan repayments, and spending patterns. It can predict trends that can have a huge impact on lending, insurance, and access to credit. At the same time, financial institutions can be warned immediately of irregularities and frauds, reducing the risk of losing revenues.
Also, AI and machine learning can access and analyze large amounts of data in mere seconds, which can immediately identify and flag unusual behaviors in the system. FICO, a data analytics company, has been relying on these two technologies to battle fraud. Last September, it launched Falcon X, which combines open-source machine learning capabilities with its machine-learning techniques to detect criminal activity.
Doug Clare, vice president of FICO, stated that the challenge with this is keeping the user experience simple with the added fraud detection capabilities. “We’re giving bank the opportunity to monitor the performance of the AI that is deployed in the system, look at all the data that flows through the system and provide mechanisms for banks to incorporate their homespun AI and monitor the performance,” she said, as quoted by Bank Innovation, a media company that has served the financial services industry since 1995.
With AI and machine learning, consumers can rely on mobile payments without worrying about their efficiency and security. Mobile payment platforms are working based on users’ interests and behavior while also protecting them from fraud and other risks. Indeed, this is a great help for busy people to save time and finish their financial tasks immediately.