Will generative artificial intelligence (GenAI) accelerate financial institutions’ journeys to increased revenue and cost optimisation? The zero-humility ChatGPT says yes and offers evidence from McKinsey, Forbes, EY, and other analysts. Even more reassuring, 54% of FSIs surveyed in EMEA, the US, and APAC have already embedded AI into their offerings or begun to expand their initiatives, and 61% plan to use GenAI in 2024.
Artificial intelligence (AI) has been a notable driver in many industries for over a decade. At OpenWay, a provider of digital payments technology to banks and processors, national payment switches, and mobile wallet operators, we often see that our clients recognise the benefits of AI. For instance:
Nexi, the pan-European acquirer serving two million merchants, launched a project in 2021 to integrate machine learning into its infrastructure, which enhanced its risk management, marketing, and operations.
Enfuce, the fastest-growing Card-as-a-Service (CaaS) provider in the Nordics, discussed AI-based scoring as a disruptor in consumer and SME lending in its blog.
Network International, a Tier 1 processor in the MEA region, is enhancing its fraud prevention services with Mastercard’s AI-powered Brighterion platform.
This year, GenAI is among the hottest topics in payments. For our client LOTTE, a consumer finance brand in Southeast Asia, GenAI is one of its investment priorities for 2024. Nexi predicts that in 2024, GenAI will ‘create hyper-personalised solutions that will enhance the shopper experience’.
GenAI embedded into a digital payments infrastructure is like a high-performance computer in a racing car. To optimise acceleration, it needs data from multiple sensors. The wheels must respond predictably to its commands to ensure an optimal trajectory. However, financial institutions name ‘data quality and access’ and ‘too much complex infrastructure’ as top barriers to delivering more value from GenAI.
GenAI needs a payment processing platform with powerful data management and a 24/7 online front- and back-office to overcome those barriers. This is the exact architecture of our Way4 software platform, top-rated by Datos Insights, Juniper, and Gartner. Way4 instantly analyses customer and transaction details, both incoming and historical, and streams the consolidated data to AI in real time.
Moreover, when GenAI proposes enhancements to a product, risk rule, or customer service scenario, Way4 can implement these requests instantly. Instead of hard coding, GenAI can configure new payment offerings using flexible parameters. Approximately 95% of product features in Way4 are parameterisable, compared to just 30-40% offered in competing systems.
Based on our clients’ best practices, we have identified four areas where combining GenAI and an advanced payment processing platform delivers maximum benefits.
Rapid creation and easy testing of new products
Product managers use the flexible rules in Way4 to create unique payment products in areas like issuing, acquiring, switching, wallets, BNPL, digital currencies, and more. Trained by the manager in a co-pilot mode, GenAI can automate many steps in product configuration and enhance pricing, loyalty programmes, value-added services, and other elements.
Optimising the cost of customer service
When a customer asks for something, a GenAI chatbot begins to exchange rich data with Way4. This enables GenAI to resolve the reported issue quickly, and even offer new personalised products or services to the customer, requesting Way4 to create the new contract instantly.
For example, when a customer is going on a trip abroad, GenAI can make Way4 transfer funds between bank accounts in different currencies or issue a virtual multi-currency prepaid card.
Enhanced risk management
During the transaction monitoring process, GenAI analyses vast amounts of customer and transaction data from multiple systems. It improves its detection algorithms and reduces false positives by continuously learning from new data. After receiving a newly calculated risk score from GenAI, Way4 adjusts its authorisation scenarios in real time.
Discovering strategic opportunities
GenAI can identify new revenue opportunities for the payments business by leveraging the rich data in Way4, including Level 2 and 3 data. Way4 captures information, like shopping cart contents, and applies various purchase restrictions and incentives instantly. GenAI can identify which government agencies or non-profits may be interested in this functionality and generate targeted proposals.
Additionally, GenAI can also analyse customer feedback, spending patterns, and emerging lifestyle trends to suggest improvements to existing products. For example, if a new travel destination becomes popular, GenAI can prompt Way4 to add another currency account to an existing card.
According to McKinsey, should these and other potential use cases be fully implemented in the banking industry, GenAI could deliver value equal to an additional USD 200 billion to USD 340 billion annually. If GenAI is part of your roadmap, we at OpenWay invite you to collaborate with us and launch GenAI-enhanced payment projects that will secure the early-innovator revenue streams for your business.
Jean-Philippe Wolyniec is the Regional Director of Business Development in French-speaking countries and Europe at OpenWay, the top-rated vendor of Way4, a digital payment software platform. With over 17 years of experience in payments and smart cards, he has actively collaborated with major banks, MNOs and retailers, also payment and public transport industry stakeholders, to launch innovative services and engineer sales strategies.
About OpenWay
OpenWay provides the Way4 digital payments software platform for tier-1, mid-size, and startup players – including card issuers, acquirers, processors, telcos, payment switches, fleet companies, BNPL providers, and digital wallet providers. Gartner, Omdia, Juniper, and Aite (now Datos Insights) have ranked OpenWay as the best digital payments software provider and payment solution in the cloud.
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