By Derek Colfer

As consumers shift away from cash and towards digital and mobile payments, financial institutions and payments technology providers are exploring new ways to make those transactions faster, easier and frictionless. The next frontier in that evolution will be artificial intelligence (AI).

AI is a computer science that aims to imitate human behaviour, such as speech or visual recognition, decision making and learning. Machine learning augments AI by enabling it to automatically improve performance through detecting patterns and predicting next actions.

It may sound like science fiction, but AI is already widely used in areas like online shopping and by virtual home assistants. Now AI is expanding into mobile banking.

In June 2018 Visa took an exciting step to embrace AI by collaborating with Vancouver-based Finn AI, a FinTech company that specializes in innovative personal banking software. Together, Visa and Finn AI will enable new capabilities in AI-powered personal banking chatbots. These features will allow banks to have more relevant and intelligent conversational relationships with their customers. Practical applications will include the ability to ask a virtual assistant where to find the closest ATM or what the best foreign exchange rate is currently. Customers will also be able to disable lost cards to prevent fraud or inform their banks of travel plans to avoid false declines.

Where AI will impact consumers

As the use of AI becomes more widespread in banking, there will be three primary areas where consumers will be impacted:

  1. Speed and ease of making payments. AI will be able to anticipate what consumers want or need, identify the best places to get products and services and then help make the transactions happen. As the machine learning algorithms gain experience, its predictive powers will continuously improve.
  2. Improved security. AI has the ability to identify many forms of security at once. This will allow for seamless integration of various forms of biometric identification on Internet-enabled devices, including facial and voice recognition.
  3. Device-agnostic commerce. Customers will be able to complete transactions regardless of device or operating system. AI will reduce the need for a user interface as voice recognition allows consumers to make purchases simply by speaking to their mobile phones, tablets, smartwatches, cars or their virtual home assistants.

One of the exciting things about AI that it is self-learning through machine learning. Over time, AI-enabled platforms will learn about the user and become more adept at understanding their needs. It will also learn from its mistakes and become smarter. Take Finn AI’s chatbot technology as an example. If it is not able to answer a question, forcing the user to speak with a human to get help, the chatbot will learn from that experience and will eventually be able to provide answers to similar future questions from subsequent customers. It will also learn to anticipate possible follow-up questions and provide that information as well.

Merchant benefits and also concerns

For merchants AI allows for more intelligent conversations with customers. They will be able to better understand what their customers want and need and anticipate their future expectations. AI applications may also provide opportunities for value-added transactions. And it may help to build relationships with customers as it becomes more comfortable interacting with certain customer-facing platforms.

AI has the ability to learn a vast amount of information about customers: which may raise privacy concerns. There have already been examples of privacy breaches caused by virtual home assistants. At Visa, customer security and privacy are a top priority. Any service that uses an AI platform that is directed at consumers would require their opt-in and provide them with a clear understanding of the data that is collected and how it will be used.

The Visa Developer Platform

Visa’s collaboration with Finn AI is enabled by the Visa Developer Platform (VDP). VDP provides simplified access to many of Visa’s most in-demand products and service capabilities through an open network of application platform interfaces (APIs), allowing anyone to transform great ideas into new digital commerce experiences.

The payments world is constantly changing and evolving. The Visa Developer programme allows Visa to work with developers to expand our capabilities and keeps our clients on the leading edge of technology, like AI.

Derek Colfer is head of digital innovation, Visa Canada. Derek has over 20 years’ experience in developing leading edge digital and mobile solutions.

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