The Emerging Symbiosis Between GenAI And Payment Modernization In Banking
There's more to GenAI than chatbots.
Payment modernization and GenAI adoption are major strategic imperatives for banks, so it shouldn’t surprise us that these two disparate technologies will have a symbiotic relationship.
Payment modernization for is so important that nine in ten (91%) banks rank it as either “important” or “very important” as they transition to a new world of instant payments.
The interesting part of this report is that it considers how AI’s impact on payments will be far more than its banal use as customer service chatbots.
AI will be used internally to improve the quality of work, increase speed, and reduce the costs of internal payment modernization projects and this will likely be a bigger game changer than chatbots!
👉TAKEAWAYS
Bank Priorities for GenAI in Payment Modernization Projects
Technical tasks In joint top position is support with technical tasks, such as software testing and code development, aimed at boosting efficiency. 36%
Impact analysis Banks are also harnessing AI for impact analysis, including regulatory updates and payment system upgrades. 35%
Strategic tasks Just under a third of banks are prioritising AI for strategic tasks, including advising on new payment strategies and planning for regulatory compliance. 31%
Surprisingly, defining business requirements for payment modernization projects is a priority for just over a quarter (27%) of banks. Banks are primarily focusing on a limited set of use cases, which, while important, may not fully exploit the capabilities of AI to drive them forward.
👊STRAIGHT TALK👊
GenAI and payment modernization go together but not in the way many predict.
GenAI isn’t capable of revolutionizing the “payment rails” on which payments travel, as these two technologies are fundamentally incompatible.
If that statement seems in conflict with AI hype you’ve read that AI will change everything, ask yourself: What exactly will GenAI do to improve Visa’s card transaction database or a stablecoin’s blockchain network?
The reality is not much.
I agree with those who say GenAI can’t assist with payment fraud detection, but this is not changing the payment rails so much as detecting what should or shouldn’t be carried on them.
This report shows how GenAI will still greatly impact payments at the critical IT, technical, and regulatory levels. These contributions are equally important to banks and have not been adequately acknowledged.
GenAI is poised to make significant contributions to payment modernization just not in the way most think.
The two technologies will have a symbiotic relationship.
You made it this far, so subscribe! Here are the six benefits waiting for you when you subscribe:
Save time: Get the expert insights on Central Bank Digital Currencies (CBDC), AI, Payments, and Financial Inclusion that you need to stay ahead of the curve, all delivered directly to your inbox weekly;
Know the future and profit: Get real payback from a unique point of view directly from Asia that focuses on how the region is “leapfrogging” the West and showing you the future;
Be prepared: CBDCs are no longer theoretical but coming soon, so keep up with the latest developments on the digital euro, yuan, sterling and dollar;
Manage your personal AI risk: Don’t be disrupted; be the disruptor. In-depth analysis of how our AI revolution impacts finance so that you can be in front of this great transformation, not behind it;
Stay objective, avoid hype: My writing doesn’t follow corporate diktats. It’s a message that doesn’t conform with mainstream media and is gritty, practical, hype-free, and, on occasion, controversial;
Stay safe: My writing is trusted by nearly 60,000 executives, innovators, investors, policymakers, journalists, academics, and open-minded crypto hodlers daily.
Readers like you make my work possible! Subscribing is free, but I am honored when readers opt for a paid subscription to recognize my high-quality writing and help keep it flowing. Thank you!
Sponsor Cashless and reach a targeted audience of over 50,000 fintech and CBDC aficionados who would love to know more about what you do!
