Here’s why AI is critical to cross-border payments

By Puja Sharma

The efficiency of financial processes and the security of money-related data can be improved massively with the power of AI. For instance, regarding fraud detection, AI monitors people’s online transactional behaviour so that any deviation and potential fraud can be identified in real-time and stopped right there.

The global AI in fintech market size is projected to increase to $46,881.9m by 2030 from $7,702.7m in 2020, at a 19.8% CAGR between 2020 and 2030, as per the Research and Market’s report. The efficiency of financial processes and the security of money-related data can be improved massively with the power of AI. For instance, regarding fraud detection, AI monitors people’s online transactional behavior so that any deviation and potential fraud can be identified in real-time and stopped right there.

Additionally, AI helps in automating a few forms within the banking, financial administrations, and insurance (BFSI) division, such as an online client engagement using chatbots, claims to process, and replying to regularly inquired questions (FAQs). This not only permits BFSI companies to decrease their use in expenditure in the hiring process but also engages employees in more-important errands, such as decision making and strategizing.

As the global business expands, so too does the volume of international cross-border payments:  $120t in global B2B payments is processed annually according to research by McKinsey and Visa.

AI is playing a decisive role in processing these cross-border payments. Tech advancements and competitive challenges have transformed the payments industry and together have combined to meet both consumer demand and standard banking regulations,” said Abdul Naushad, President, and CEO, Buckzy.

Buckzy Payments is a cross-border payments network and embedded finance platform enabler for leading financial institutions and FinTech worldwide, delivering a modernized and proprietary real-time cross-border payment settlement network.

A significant part of AI’s value in cross-border payments lies in how it substantially improves security.  But AI’s value of the financial sector doesn’t end there. It improves operational performance and efficiencies and delivers value in other key processes.

“AI’s ability to distinguish patterns and suspicious behaviors is invaluable for identifying fraud and suspicious transactions, and also safely and securely processing sensitive financial documentation,” added Naushad.

Using AI, it’s possible to generate expenditure reports faster than humans and with far fewer errors. Furthermore, AI can automate repetitive tasks such as data entry and leverage pattern recognition for key activities like fraud monitoring, security, and compliance alerting human staff to potential concerns and allowing them to focus on high-value activities.

Creditworthiness is another important area in finance where AI delivers value. Banks and financial institutions are businesses that need customers to make money. However, some potential customers are ignored or rejected by existing credit-rating processes.

“Using AI-driven processes to assess a person’s creditworthiness according to their personal information can help a bank calculate the cost and risk of accepting that person as a customer more accurately and effectively,” he added.

AI-powered solutions are an integral part of banks’ strategies, helping them to remain competitive in the market. AI minimizes operating costs, automates processes, and improves the customer experience.

“In finance, there is no future without AI. Our financial lives are becoming more complex, and it’s incumbent upon banks and FinTech to equip their human workforce with the necessary tools to keep pace with this complexity. Cross-border payments are increasingly important for economic prosperity, international trade, global financial stability, continuing growth in international eCommerce, and especially poverty reduction. Having a frictionless solution based on AI for cross-border payments is therefore essential.” Naushad noted.

Mobile payments are a key trend in the market as the increasing volume encourages online payment platforms to be equipped with artificial intelligence for better management, efficiency, and reduced fraud. The North American BFSI segment, led by the US, is the largest user of AI solutions. This is due to the presence of the largest IT and financial companies, the development of IT infrastructure, and the increased penetration of advanced technologies.