The AI Balancing Act: Fighting Fraud Without Friction in Digital Payments

David Ketley, Executive Director of Banking & Financial Services at CSG, explores how AI-driven modernisation enables banks to fight fraud without adding friction – balancing security, speed, and profitability across the digital payments ecosystem.  

The banking industry has long operated under a false binary between security and convenience. Ultimate fraud prevention alone is easy—just layer enough defence, and transactions become so painful that no business can use them. But then you lose customers, too. 

However, modernisation in commercial and institutional banking is about much more than fraud. It’s about enabling operational resilience, regulatory compliance, and monetisation, all while keeping optimal transactions. Artificial intelligence (AI)-powered analytics, modular cloud-native architectures, and intelligent friction help banks achieve that balance, protecting customers and revenue without slowing the business.

AI Scales Risk Management and Profitability

Traditional fraud systems act as rigid gatekeepers, slowing operations and struggling to adapt to new threats. AI changes this game by detecting subtle fraud patterns in real time, while keeping legitimate customers moving. It continuously learns from evolving attack vectors and scales across high-value, complex transactions without degrading the customer experience. 

Nearly 60% of banks now use AI for real-time transaction monitoring, dynamic pricing, and personalised recommendations, but AI’s true power emerges only within modular, cloud-native architectures. This combination accelerates decision-making, scales operations, and directly drives revenue and risk-adjusted profitability. 

The impact:

• Smarter product recommendations increase conversion and retention.
• Real-time credit risk assessments reduce losses while improving operational efficiency.
• Dynamic billing models transform back-office operations into growth engines.

Intelligent Friction: Security That Makes Sense

Modernisation isn’t about friction for friction’s sake. AI-powered risk scoring and adaptive authentication enable banks to apply ‘intelligent friction’ that is proportional, context-driven, and efficient.

The benefits include:

• Faster, more accurate detection of complex fraud.
• Reduced false positives, improving customer experience. 
• Compliance and auditability built into day-to-day operations. 

By embedding security from the start rather than tacking it on, banks can protect high-value transactions while ensuring customers move effectively through payment flows.

Dynamic Billing: Intelligence Behind the Transaction

For institutional customers, billing isn’t just about invoices but a source of intelligence. Real-time insights allow banks to optimise pricing, plug revenue gaps, and turn what was once a back-office function into a competitive advantage. In short, smarter billing drives profits, not just process improvements.

By integrating AI and modular SaaS-enabled systems, banks can capture every transaction accurately, identify anomalies, and feed that intelligence back into fraud detection and dynamic pricing. The result is smarter billing that not only saves time but also directly drives profits and supports frictionless, secure payments at scale.

Hybrid, Modular Systems: The Backbone of Modernisation

Auditable data processes, explainable AI, and modular cloud-native architectures are at the heart of resilient banking. These hybrid systems balance innovation with human oversight, allowing banks to scale AI-driven operations without compromising trust or regulatory compliance.

The results include:

• Incremental modernisation reduces risk while delivering tangible outcomes.
• APIs and SaaS layers accelerate product launches, shorten time-to-market, and lower operational costs.
• Billing and pricing innovations transform core systems from cost centres into profit centres.

Without this modular, cloud-native foundation, even the most advanced AI capabilities cannot operate at the speed or scale required for high-value institutional payments.

The Balancing Act in Action

Commercial and institutional banks must move beyond selecting between security and convenience. As CIOs look to modernise, the leaders will embrace AI-driven and transparent platforms that accelerate new business models, strengthen monetisation, and reduce the cost of change while maintaining regulatory confidence and customer trust. 

By integrating AI, modular architectures, and strategic billing, banks will achieve measurable business outcomes, including reduced cost-to-serve, faster product launches, improved fraud detection, and higher revenue per customer. 

With that, it becomes crystal clear that modernisation isn’t a marketing exercise but a competitive advantage. Because when these capabilities work in sync rather than in silos, even traditional banks gain fintech-like agility while maintaining the resilience, transparency, and profitability they need to thrive in the future. 

The next chapter of commercial and institutional banking will belong to those who treat intelligent, data-driven modernisation as the foundation of their strategy, not an afterthought.

About David Ketley

David Ketley is Executive Director, Banking & Financial Services at CSG and a seasoned BFSI and technology executive with more than 15 years of leading growth and digital transformation across APAC. At CSG, he drives the regional strategy to modernise pricing, billing and customer experience. He helps banks unlock value from legacy systems through modular SaaS, real-time data orchestration, and scalable AI. David works with financial institutions across trade finance, payments, lending and treasury to improve automation, compliance and profitability. Known for aligning technology with regulatory change, David brings deep expertise in operational risk, data digitisation, and customer lifecycle transformation. He helps banks modernise with confidence and compete with agility.

 

About CSG

 

CSG helps financial institutions turn rising operational complexity into a catalyst for growth. Our revenue, data, and deal management solutions bring speed, scale, and precision to pricing and billing across even the most sophisticated portfolios. By streamlining the full pricing-to-billing lifecycle, we enable faster deals, stronger margins, and lower risk, modernising core systems without disrupting the resilience financial institutions rely on.