ChatGPT and Generative AI in Payments: Reality, Hype, What's Next ...
ChatGPT, a conversational AI model developed by OpenAI, has been gaining a lot of attention lately and has become the most talked-about technology of 2023. Payments services providers are now looking to unlock the potential of generative AI that powers it. This revolutionary technology is set to transform various sub-verticals within the payments industry, such as payment networks, mobile wallet providers, and issuing banks.
Generative AI will bring numerous positive use cases in the payments sector. Some of the most significant ones are expected to be in authentic chat, personalization, credit scoring, payment optimization, and fraud detection. While generative AI has a lot of potential, there are still some not-so-promising use cases in payments, which include security and compliance.
The rise of generative AI may appear sudden, but it will take some time for industries to fully embrace its disruptive impact. The payments industry needs to be prepared for its rise to take full advantage of its potential. Providers must be aware of where generative AI has the most impact in payments, the most and least promising use cases for the technology, and the actionable steps needed to prepare for its rise.
One of the most promising use cases for generative AI is authentic chat. ChatGPT can improve customer experience by communicating with users in a natural language that feels like talking to a human. In addition, generative AI can enable personalization of the payment experience by understanding user preferences and tailoring recommendations accordingly.
Credit scoring is another promising use case for generative AI in payments. ChatGPT can analyze customer data and provide accurate credit scoring, which can be especially useful for underwriting loans and credit card applications.
Payment optimization is yet another promising use case for generative AI in payments. ChatGPT can analyze payment data to identify patterns and recommend ways to optimize payment processes.
Fraud detection is an important use case for generative AI in payments. ChatGPT can detect patterns of fraudulent transactions and alert providers to potential threats before they cause significant damage.
However, generative AI has some limitations in the payments industry. For instance, it may not be the best solution for security and compliance issues. To achieve complete compliance, human intervention may be necessary.
In summary, generative AI is expected to revolutionize the payments industry, and its impact will be significant. Providers need to be aware of the use cases where it can make the most impact, as well as its limitations, to fully embrace this technology's disruptive potential in the payments industry.
