Many of this year's Most Influential in Payments weighed in on how AI in its many forms is impacting their business, suggesting a momentum that makes staying on the sidelines a nonstarter.
"Love it or fear it, it is game-changing technology. It has many benefits that help with risk modeling, fraud detection and making fraud teams more efficient," said Cathy Beardsley, president and CEO of Segpay. "AI can help filter transactions and speed those that typically would need manual review."
Beardsley and other featured executives will discuss AI and other topics at this year's Payments Forum, taking place in Hollywood, Florida, on March 27-28, 2024.
Segpay and other payment firms and fintechs are adding AI in a high-demand environment, since financial institutions believe AI will play a major role in future success. When asked what technology could give them a competitive advantage in the next two years, 20% of bank executives said AI, 15% said generative AI and another 7% said data analytics, according to research from
Beardsley is one of many honorees of 2024's Most Influential Women in Payments who discussed the impact of AI on her company and the payments industry as a whole.
MoneyGram Chief Operating Officer Anna Greenwald said that for digital payments and financial services providers like MoneyGram, the effective use of AI "will be the difference between winners and losers in the next decade." While MoneyGram is in the early stages of its AI journey, Greenwald said that AI and back-office automation created million-dollar savings for the company in 2023, and she expects that number to grow in 2024.
Newer forms of AI such as gen AI, which is designed to dive deeper into data to generate original content, have provided a catalyst for the adoption of AI and machine learning.
Many organizations spent 2023 exploring the possibilities of gen AI, and the biggest opportunities will be incorporating gen AI technology into existing commerce and payment solutions, as well as developing new products that utilize gen AI capabilities, said Shannon Johnston, CIO and senior executive vice president of Global Payments
"Strengthened governance tools are providing increased confidence that gen AI models' outputs are explainable and that alerts will help prevent drift and flag inappropriate decisions," Johnston said. "With these guardrails in place, gen AI implementation will become more common across the fintech industry."
Organizations will also scrutinize the data set they use to train their models, making sure the volumes of data are not so large that the cost outweighs the benefit, according to Johnston.
Next generation AI
The sudden growth of gen AI since the fall of 2022 has drawn fresh attention to the technology, which has existed in some form for decades. The use of large language models and machine learning will help staff do their jobs, manage risk, write, code, produce marketing and handle many other tasks.
Using AI's advanced analytics can help identify patterns in transaction data that could not be detected using traditional methods, Beardsley said. AI tools help Segpay's risk team act on suspicious information to stop fraud, almost in real time. "It can also detect fraudulent user behavior by analyzing its geolocation and transaction history too," she said.
Given gen AI's ability to act as an advanced digital assistant at work, producing research and reports on demand, payment executives are both excited and anxious to see how gen AI
AI has the potential to help companies harness the vast amounts of data that financial transactions produce. This data can inform payment companies and their merchant clients about the specific payment methods used, what consumers look for when shopping, how much time they spend shopping, and whether an out-of-place transaction has signs of fraud.
Companies that can use this technology successfully can
"Machine learning and generative AI tools can help unlock the value of this data across a range of potential use cases."
In 2023, Payoneer implemented AI initiatives designed to help the firm streamline, regionalize and outsource some of its operations. This has enabled Payoneer to reduce handling times, improve customer satisfaction and meaningfully drive down customer-service costs, Ordonez said.
For example, Payoneer has reduced the average cost of a customer-service ticket by 25% since the end of 2022. It accomplished this by optimizing workflow so the company can resolve more tickets in a single interaction through the use of automating processes, and by implementing certain generative AI-enabled tools and communications.
"In our organization we are intently focused on driving data transformation to unlock the power of our data to drive more efficiency in our compliance processes, to make better underwriting decisions in our lending business, and to focus our acquisition efforts on those customers who meet our ideal customer profile," Ordonez said.
At another firm, Featurespace, gen AI is both at the heart of innovation of fraud prevention analytics and influencing how the company works, according to Carolyn Homberger, the company's president of the Americas.
In late 2023, Featurespace introduced a large-scale, self-supervised, pre-trained large transaction model designed to power the next generation of AI applications for financial services and payments.
Against a backdrop of increasingly sophisticated fraud attacks, the Featurespace Large Transaction Model (named TallierLTM) has been trained on billions of transactions and is able to provide an improvement in fraud detection of up to 71% against industry standard models, Homberger said.
"[Our] team members are not only encouraged to leverage Featurespace's generative AI, but also use what is available in business functions such as sales, customer success, marketing and data science," she said. "Given the results we've experienced in payment fraud prevention, the potential to drive productivity across all business functions is extraordinary."
Big retail AI
Much of the early focus on gen AI is how it can reduce workloads for internal workers. Generative AI can reduce working hours by up to 72% in the banking industry, according to research published in
Gen AI has had a significant impact on Walmart's business, according to Kelly Haren, senior director of payment acceptance for the retail chain. Haren has led discussions at industry events regarding AI in the payments space, discussing topics such as terminology and what the current legal and regulatory landscape looks like.
"We also discussed AI use cases in the payments space, which I believe will continue to evolve. Top-of-mind use cases for AI and generative AI include anomaly detection, automation of reporting, ingestion of data from third parties and document review to name a few," Haren said. "By simply beginning to use AI and generative AI in these areas, payment stakeholders are able to improve operations and provide better experiences for their customers."
At Walmart, AI tools include My Assistant, which helps the company summarize large documents and to spark creativity. It enables staff to quickly generate content and ideas, which can then be refined and improved upon. That helps staff save time on first drafts for projects, summarize large documents, and kick-start product development.
"This tool allows us to quickly generate content and ideas, which we can then refine and improve upon using our subject-matter expertise," Haren said. "This is the crux of why I use this tool multiple times a week."
Later this year, Walmart plans to expand My Assistant to 11 additional countries in which it operates.
"By using generative AI, we are able to drive speed and reduce costs, while also ensuring control and data governance," Haren said.
Walmart is additionally using AI in supply-chain management, inventory management and customer service, among other departments. "By using AI in these areas, Walmart is able to improve efficiency, reduce costs and provide better experiences for its customers and members," Haren said.
Other moves at Walmart include integrating AI through the company's website and apps to enhance and customize the shopping experience. The company has publicly discussed the possibility of updating its
Sam's Club is currently running pilots at some locations of an application that combines AI and computer-vision technology to eliminate manual receipt validations at the club exits.
Walmart has put policies and guidelines in place to ensure that the company is using gen AI in a responsible and ethical manner, Haren said. That includes prioritizing data governance and ensuring that the retail chain is using the right models for the right use cases.
"In addition, avoiding vendor lock-in means ensuring that the company is not overly reliant on a single vendor or model, and has the flexibility to switch to different models or vendors as needed," Haren said. "This helps to ensure that the company can continue to innovate and improve its operations."
