Ever wondered how AI is shaping the world of payments? Stax’s Mark Sundt sat down with John Gaffney from PYMNTS to dig into this topic. As Chief Technology Officer at Stax, Mark’s at the forefront of artificial intelligence in the industry. His expertise provides a unique window into the cutting-edge developments shaping the future of payments.
From identifying fraudsters to revolutionizing customer service, Mark explained how AI is already making waves in payments. He also gave a glimpse into the future, hinting at some pretty exciting possibilities that could change the game entirely.
Fraud Detection: A Key Focus
When it comes to AI in the payments world, fraud detection is still the heavyweight champion, according to Sundt. “There’s merchant onboarding and there’s transactional settlement fraud that we focus on.” In other words, they’re keeping their eyes peeled at every step of the process.
But what exactly are these AI watchdogs looking for? Here are some red flags that make digital alarm bells ring:
- The “Oops, I Didn’t Mean It” Move: Large transactions quickly followed by reversals.
- The Credit Card Shuffle: When refunds pop up on different cards than the ones used for the original purchase.
- The Personal-Business Blur: Merchants making big-ticket transactions on their personal credit cards.
“Those are super suspicious,” Sundt emphasized. “And those are the things that we have to catch.”
It’s clear that in the game of payments, these AI systems can help flag the transactions that don’t quite add up.
The Future of Customer Engagement
When discussing AI’s potential in customer engagement, Sundt expressed enthusiasm about the future of hyper-personalization. He delved into the concept of “context windows” in language models and highlighted the promising potential of integrating relational data with AI systems.
“I’m really excited about that because we haven’t really made that transition to relational data augmenting our models yet,” Sundt explained. “But that’ll kind of be the thing that I think will give us a hyper personalization on the customer service front.”
Sundt’s described how this integration could significantly enhance the customer service experience. He sees a future where AI systems can leverage comprehensive, interconnected customer data to provide truly personalized interactions. This advancement, according to Sundt, could mark a significant leap forward in how businesses engage with their customers, potentially transforming the landscape of customer service.
Bridging the Gap: AI Companies and the Financial Industry
Sundt didn’t shy away from discussing the need for better alignment between AI companies and the banking and payments industry. With a tone that mixed caution and optimism, he stressed how crucial transparency is, especially when it comes to data usage and privacy.
“We need to make sure that we understand where our data is going so we can try to eliminate the privacy concerns and making sure that people aren’t training on our data.” – Mark Sundt
Sundt raised an important point about derivative works, “There’s a slippery slope as to where does my data end, where does your privacy statement end? Are you summarizing my data? And is that being covered within our privacy and security policies?”
It’s clear that for Sundt, these aren’t just theoretical questions. They’re real-world challenges that the industry needs to grapple with as AI becomes increasingly integrated into our financial systems. His words serve as a reminder that in the rush to embrace AI, we can’t afford to leave privacy and security behind.
Looking Ahead
As AI continues to push boundaries, Sundt sees a world of opportunity for the payments industry. But there’s a note of caution. For Sundt, clear communication and transparency from AI providers aren’t just nice-to-haves – they’re absolute must-haves.
“If you’re going to use the data in some statistical sense, that’s great. Just let me know. That could be very valuable to people over time and it might not be caught within a standard privacy policy.” – Mark Sundt
The payments industry is at a crossroads, with AI as its new traveling companion. As it charts this course, the insights from industry veterans like Mark Sundt will be invaluable. His focus on transparency, data privacy, and innovative AI applications paints a picture of an exciting future for payments and artificial intelligence that’s being written right now.
Watch the full interview with Mark Sundt and PYMNTS to learn more.
