Banks are using AI-driven solutions to gather critical business information and boost the efficiency of credit card transactions.
FREMONT, CA: Artificial intelligence (AI) is miraculously transforming the financial sector and services. The technology is influencing the innovations and trends across the banking verticals. One of the ways by which AI impacts the banking sector is through its influence on credit cards. AI is not only making credit cards safer and more user-friendly but also shaping the way people interact with money at large. The following are the ways by which AI is transforming the credit card business for bankers.
Relevant Customer Offers
Like social media marketers leverage ad retargeting to deliver highly relevant advertisements to users, credit card companies can also design reward programs that are based on the customers’ past redemption activity as well as buying behavior. AI enables hyper-personalization, allowing the customers to get more relevant rewards and bonuses.AI algorithms can aggregate the past spending habits of the customers and use it for future recommendations of offers as well.
Addressing Credit Card Frauds
Credit card fraud affects a fairly significant amount of population. While traditional technologies were not adequate to stop the occurrence of such events, AI enables banks and credit card companies to spot dubious activities almost instantly. This capability is achieved with a significant reduction in false positives, thereby resulting in enhanced customer experience. Data analytics equipped with AI capability minimizes false positives and obtains accurate data in case of a transaction.
AI is already contributing to the huge credit card industry. Whether it is using algorithms to recommending means to redeem loyalty points or to target new potential customers, financial institutions are relying on AI technology for various operations and services in the credit card industry. AI is also being used to estimate the creditworthiness of potential customers in the emerging markets in Africa, Asia, and Latin America. Such a capability would open up areas for quality loans with a high likelihood of repayment.
AI will enable the banks to make the best decision in terms of allocating the line of credits and loans to the customers as well as streamline the internal processing of the financial operations.