CBA may use genAI 'customers' for tests, Elavon gets a license in the U.K.

Commonwealth Bank of Australia is examining how it can use generative artificial intelligence to simulate customers testing products, and U.S. Bancorp's Elavon unit receives a financial services license from the Bank of England.

Here's what's happening around the world.

CBA might use AI 'customers' to test products

Commonwealth Bank of Australia is examining how it can use generative artificial intelligence to create faux consumers who can test new products. Speaking at South by Southwest Sydney last week, Dan Jermyn, CBA chief decision scientist, said the technology can enable machines to process and interpret patterns to create "new outputs." The bank plans to use these new outputs to create chatbots that will perform experiments on products to see how popular the products may be. "By drawing on simulated experiences of daily life to emulate behaviors, we're testing whether these GenAI chatbots could provide qualitative and quantitative understanding of how customers might respond to changing contexts, everyday financial challenges and new products," Jermyn said in a release reporting on his speech. The bank plans to use the bots as a way to enhance research, rather than replace real humans. "We could use GenAI to enable us to get a better product or service in front of customers earlier," Jermyn said. Banks globally are looking for easy to use generative AI, and are normally focused on customer service or to help internal staff with technology issues. —John Adams

U.S. Bank's Elavon gets a license in the U.K.

The Bank of England has granted a financial services license to Elavon, U.S. Bancorp's payment processing subsidiary. The license will enable the bank to offer products such as authorization, settlement, and investment services. Elavon had already provided payment processing in the U.K. and was operating under a temporary license following Brexit. "The U.K. market is vital to our business and an integral part of our footprint in Europe. We have long been a reliable and trusted payments partner for businesses large and small in the U.K. This authorization strengthens our reputation in the U.K. and as a global payments leader," says Hemlata Narasimhan, president of Elavon Merchant Services, in a release. Elavon recently upgraded its payments technology to expand support for in-store terminals, and Tap to Pay, which enables store staff to use their own smartphones to accept payments without adding extra hardware. —John Adams

Rabobank adds risk gauge for fighting fraud

Netherlands-based Rabobank has expanded its partnership with local payments firm SurePay to increase the range of international bank account numbers the bank can check to vet payments to ensure the parties sending and receiving the payment are valid. The bank and technology company have also released a fraud risk indicator, which will report risk scores for banks to use to flag potential payments or users for fraud. The indicator will be in addition to the standard confirmation of payee checks that are done as part of the IBAN scan. Rabobank says this expansion uses its existing API connection to SurePay, which will minimize the amount of work the bank had to do to expand its security. The bank is attempting to add speed to fraud prevention, a vital step as more payments process in real time. Visa, for example, recently began tests on a fraud prevention service that uses artificial intelligence. Called RTP Prevent, it produces a risk score for instant payments so banks can decide to approve or reject the transaction. Similar to Rabobank's service, Visa also contends the score is aimed to reduce false positives, or transactions that are illegitimately flagged. —John Adams

BNP launches payments fintech

BNP Paribas has introduced Panta, a standalone venture that will sell transaction processing technology to B2C marketplaces. Panta initially will sell to BNP's clients in Europe, though it may later expand its reach to include B2B and B2C companies in other regions. The new venture will use an application programming interface to enable firms to access digital payment services and other e-commerce products. Panto is scheduled to launch early in 2024, and will operate as an agent of the bank while it awaits regulatory approval. Payment firms such as Stripe, PayPal and Square have long sold payment technology to online and brick-and-mortar merchants, and BNP hopes to create an alternative in an effort to keep more of its clients' business. —John Adams

Mastercard partners with Remitly to expand cross-border transfers

Digital payments firm Remitly will add Mastercard's Send P2P transfer product and the card networks' cross-border service in an effort to reach more consumers for remittances. Mastercard is pegging the collaboration to internal research on international payments. Its 2023 Borderless Payments Report found that 41% of consumers who made international payments to family and friends in the past year plan to expand the number of transactions they will make in the next 12 months in an effort to ease financial pressure. The card network also cited a Remitly survey that found 34% of people say remittances are the primary source of income for the recipients. Mastercard rival Visa recently announced a partnership with Paysend to support cross-border transfers to Visa cards in more than 170 countries, with a focus in the U.S.-to-Latin America corridor. —John Adams

BBVA reorganizes its tech subsidiaries

BBVA is combining the technology companies it owns in an effort to centralize research and development. Called BBVA Technology, it will include BBVA Next Technologies, BBVA IT Espana and Datio. BBVA will have 3,000 employees in Madrid, Barcelona and Bilbao. The bank hopes the move will improve brand recognition for technology and make it easier to recruit and develop careers for technology staff. BBVA recently made a similar move in its security operation, centralizing a team of about 800 people to simplify communication and collaboration in its effort to fight payment fraud, anti-money-laundering and other financial crimes. The bank also hopes to increase its use of artificial intelligence in both product development and security risk. —John Adams

Ingenico expands merchant financing

France-based payment technology company Ingenico has partnered with fintech Jifiti to enable merchants to offer financing from third-party financial institutions. The merchants will access Jifiti's network of financial institutions and Ingenico's cloud-hosted payments platform to enable both payments and lending. The partnership covers merchant credit and installments. Stores can access credit based on future payment flows similar to products from Square and PayPal. Merchants can also offer more buy now/pay later options to consumers, enabling Ingenico to compete with fintechs such as Klarna, Affirm and other BNPL providers. Ingenico has added more digital payments and finance technology over the past few years as it diversifies beyond its traditional hardware business, initially adding BNPL to its point of sale menu earlier this year. —John Adams

Citigroup CEO Jane Fraser says the ‘new S’ in ESG is security

The escalating tensions between Israel and Hamas are prompting global business chiefs to think more about security issues, according to Citigroup Chief Executive Officer Jane Fraser. "There is a new S in ESG which is security, be it food security, energy security, it could be defense, or financial security," Fraser said on the first day of Saudi Arabia's flagship investment conference. "That's certainly a theme for all CEOs around the world - how to build more resilient companies and countries." Fraser was speaking on a panel alongside JPMorgan Chase Chief Executive Officer Jamie Dimon, and HSBC Holdings Plc head Noel Quinn. The Future Investment Initiative is being held against the backdrop of war between Israel and Hamas, which is designated a terrorist group by the U.S and Europe. "We're sitting here with a backdrop of the terrorist attack in Israel and the events that have unfolded since, and it's desperately sad," Fraser said. "It's hard not to be a little pessimistic." —Matthew Martin, Bloomberg News