Artificial intelligence is no longer just in the realm of science fiction. While we have been long promised AI that will enhance our day-to-day lives, the fact is that it is already here and doing just that. Though AI capabilities like that depicted film, television, and video games is still quite a ways off, the AI that does exist improves the world around us nevertheless.
AI has been a major driving force in business innovation over the last few years, and while the layman may never know it, AI has already affected their life in some way or another. One way that artificial intelligence and machine learning has an enormous impact on society is through the influence of the credit card industry. Behind the scenes, AI is working to make credit cards safer and more user friendly. More than that, it is shaping up to change the way we interact with money at large.
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Plastic Is King
In the past, cash has always been regarded as king. Cash has always been a safe, reliable, foolproof way to pay for goods and services. However, in this modern day and age it is the credit card that reigns supreme. Card and mobile payments are quickly becoming the new norm as the technologically fast-paced world continues to develop and spread.
Credit cards and mobile payments are currently on pace to dominate the business world in the near future. In 2015, nearly 5 percent of the United States’ GDP was transacted through credit cards, and while the number of U.S. households with credit cards is steadily increasing, the number of households with revolving debt is in decline. Despite the increasing number of those with credit cards around the world, advancements in credit card security have actually significantly reduced instances of credit card fraud.
In the United Kingdom in 2017, consumers paid with cards a whopping 13.2 billion times and made transactions using contactless payments 5.6 billion times. Nearly two-thirds of people living in the U.K. now use contactless payments, and for the first time in history cash payments have been eclipsed by card and mobile payments. This trend doesn’t show any sign of slowing, which means businesses worldwide are making moves to cater to this new mobile and plastic first economy.
AI Is Everywhere
AI is already being used in the healthcare world to predict risk factors for developing certain diseases, providing support for treatment methods, and even aiding in the discovery of new drugs. The ability of AI to improve diagnostics and predict certain illnesses is invaluable to the medical field, and in many ways the future of medicine lays within AI.
The inexorable march of AI-powered technological advancement permeates nearly every facet of the modern world, and it can yield tangible results in the business world. AI is shaping the future of business by streamlining manufacturing and day-to-day operations, finding and filling information gaps, increasing a project managers’ ability to assess project goals, and reduce the overall workload on employees from the factory floor to the board room. In recent years, business owners have even begun utilizing automation software to complete taxes, a traditionally intensive and stressful process. AI, simply put, makes business just that much easier to conduct.
Apart from increasing the ease with which business can be conducted on multiple levels, AI also has the potential to increase overall profits for a company. Companies are using AI to drive higher sales and and improve the user experience by identifying patterns in data sets that can help businesses provide a unique and personalized experience. AI has even been used to develop a visual search engine, allowing consumers to quickly discover what something is when they see it out in public. This is all moving consumers directly toward products, decreasing the need for advertisements and education in marketing.
Innovation Is Constant
AI and machine learning has actually already been a part of the credit card industry for decades, and it is only getting smarter by the day. Whether it is using algorithms to target new potential customers or recommending ways to redeem loyalty points, AI has been integral to the rise of the credit card as a main form of payment. AI can review spending data for millions of individual users in order to target them with offers with high specificity and accuracy.
However, AI does so much more than that. AI actually has the potential to reshape how humans get loans and may even one day render credit scores obsolete. AI can parse unconventional data points to evaluate creditworthiness of individuals in emerging markets in Asia, Africa, and Latin America, opening up these areas for quality loans that have a high likelihood of repayment.
Even credit card fraud can be stymied by AI, as artificial intelligences are being trained to suss out current fraud techniques and will eventually be able to predict future fraud techniques before they are put into practice. This is beneficial to all sides, as consumers will be protected from fraud while lenders have to deal with less fraudulent activity on their end as well. It isn’t entirely unlikely that AI will one day completely wipe out credit card fraud, improving on an already increasingly safe world of digital transactions.
Artificial intelligence is here to stay, and while some might view it as a gimmick or fear it as a potential threat, AI is often misrepresented and misunderstood. Whether it is helping us solve medical mysteries or protecting us from fraud, AI has been an incredible boon to humanity since its inception. There is only upward mobility from here, and AI has the momentum to achieve some truly amazing things within our lifetime.
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How AI Has Impacted the Credit Card Industry was originally published in Becoming Human: Artificial Intelligence Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.