The AI Book

CHAPTER 28Artificial Intelligence: The Next Leap Forward in the Payments Revolution

By Tamsin Crossland¹

¹Senior Architect, , Icon Solutions

The financial payments sector is undergoing a revolution, leading to an increase in the volume of digital payment transactions across the world. In emerging markets, especially in Southeast Asia, this is due to a rapid increase in smartphone ownership and improved internet access. In Europe and the USA, the development of new technologies driven by open banking in the European Union, along with the growing use of contactless payments and e-wallets are leading to ever-increasing numbers of digital transactions.

This rise in digital transactions is further increased by artificial intelligence, with both virtual assistants and recommendation engines generating additional sales. Additionally, the emergence of faster payment technologies enables settlements to be performed within seconds. This increase in payment volume and speed means that existing manual labour-intensive fraud detection processes are proving inadequate.

Meanwhile, machine learning is finally becoming commercially viable, and has the potential to revolutionize fraud detection. Although machine learning has existed since the 1950s, the technology has only recently become commercially viable due to the increase in processing power of computers predicted by Moore’s Law and the emergence of big data.

Machine learning is a technology built using artificial neural networks that ...