Whether AI will influence how banking organisations, and the payment industry in general, operate is no longer up for debate. A European Banking Authority study reports that 92% of EU banks were already deploying AI, with the remaining 8% pilot testing or discussing use cases. Instead, the debate now focuses on where the additional intelligence delivered can be deployed to improve economic and operational outcomes. The world’s moved on from a race to leverage AI technologies. It’s now much more focused on the race to understand how leveraging AI improves value.
With Finacle analysis showing AI is increasingly being deployed across onboarding, payment orchestration, real-time protection and governance processes, AI is evidently embedded within the payments technology stack. Yet the question remains: can technology help organisations reduce risk, increase operational resilience and effectiveness, and simultaneously improve the payment experience?
It’s a strategic, not a technology issue
There’s a strategic issue at play here. Faster digital payments put pressure on institutions to rapidly identify unusual activity, while maintaining an optimal user experience for legitimate customers. AI is already delivering strong capabilities in this area within modern payment platforms, combining real time omni-channel monitoring, machine learning models and case analysis with long-established rules and behavioural profile activities. By combining evolving technological capabilities intelligently across operations, there is a real opportunity to improve risk decisions in a fast-moving payments landscape.
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The critical role of interoperability
AI insight only adds value if the environment enables it to influence appropriate business decisions. Real-time data, interoperability and orchestration require a platform that can effectively centralise the management of multiple payment options. Data analytics need to deliver insights to help organisations manage increasingly complex payment flows. But data on its own isn’t enough: organisations need a payments layer that’s capable of acting on that intelligence and connecting it to the payment decision. This shifts the focus away from individual AI products and requires institutions to take a step back and assess the architecture that connects data, decision-making and transaction execution as a singular, harmonised entity.
All the data in the world will fail to deliver value without the right technological architecture. Yes, it will make data easier to interpret and act upon – but its value will only become apparent when it is relevant, timely and connected to real-world operations. Modernisation isn’t simply about processing transactions more quickly and gathering more data, it’s about how that intelligence and speed is deployed to inform better decisions. And when this occurs, data architecture and payment modernisation are transformed from being discrete technology implementations into a robust, all-encompassing initiative.
Creating an enabling IT architecture
There’s no value in investing heavily in AI models and experimentation if the infrastructure needed to operationalise them is missing. Real-time processing, APIs and omni-channel visibility are more than just buzzwords: they’re the enabling capabilities through which AI adds value. Organisations need more than just algorithms, they need to create holistic payment environments capable of providing instant transactional context, connecting cross-channel activities, orchestrating disparate payment options and integrating with other systems and risk control profiles. Only then will payments architecture be capable of operationalising safely and at scale.
AI is evolving from merely analysing activity towards enabling autonomous workflows. Yet in a strictly regulated financial services industry, these advances need to align with governance and transparency expectations. Recent Bank for International Settlements research highlights how strict adherence to these considerations will become increasingly important as AI becomes deeply embedded in banking and payment operations through agent enabled routine cash management tasks.
Transforming intelligence into possibility
AI opportunity in payments goes way beyond simply adding technology and intelligence everywhere. It’s about creating an environment where intelligence is transformed into secure, reliable and scalable action. Successful AI deployments will add value through reducing risk, improving the quality and speed of decision-making, removing operational friction, and fundamentally delivering better payment experiences for providers and customers.
Julian Farley, Sales Director UK and Europe, BPC
