Predicting the future of payments and banking in 2024

As 2024 comes to an end, PYMNTS has compiled insights from industry leaders through its “What’s Next in Payments” series, offering a predictive lens into the evolving landscape of banking, payments, and the connected economy, with particular emphasis on the influence of artificial intelligence (AI) automation on businesses.

The series commenced in February, shedding light on the burgeoning importance of generative AI in the financial sector. Billtrust CEO Sunil Rajasekar addressed the need for effective regulation to establish checks and balances in AI technologies, underscoring the importance of explainability in developing AI models. “I do believe that the overall trajectory is going to ‘up and to the right,’” he remarked, adding that while challenges may arise, the potential for growth in generative AI remains promising.

April witnessed the discussion of the evolving definition of a bank, as 14 executives shared their perspectives on the continuously changing landscape of financial services. Michael Haney, head of product strategy at Galileo Financial Technologies, expressed that the pandemic has fundamentally altered consumer behaviour, stating, “The pandemic was the final nail in the coffin of consumers not being forced to go where their bank is, and instead have the bank come to them.” This shift necessitates that banks adapt to a competitive environment increasingly dominated by consumer expectations and the accessibility provided by technology.

In June, emphasis shifted to payments modernization, revealing that consumer needs and expectations are driving innovations in payment systems. Seth Perlman, global head of product at i2c, articulated that the ultimate objective of innovating payment systems is to enable consumers to access and utilise their funds more efficiently. Rossana Thomas, vice president and general manager of Enterprise Payments Platform at Fiserv, highlighted that customers desire real-time and flexible payment capabilities, suggesting that technological advancements are reshaping these expectations.

As the discussion progressed to digital transformation in September, executives noted the crucial role of fraud detection in streamlining digital interactions between banks and customers. Brad Rosenfeld, Chief Marketing Officer at Prove Identity, pointed out the surge in mobile-first solutions in markets such as Brazil and India, which are capitalising on technology to enhance customer experiences. “Smartphones are with you every second of every day,” he remarked, advocating for mobile identity verification solutions to improve security while minimising fraudulent activities.

By December, the focus turned to combating fraud within the financial ecosystem. The democratization of financial services has spurred connectivity among banks, merchants, and consumers, with the advent of open banking allowing for greater integration with third-party applications. Akbar Hussain, co-founder and general counsel at TerraPay, provided an analogy, stating, “It’s like if someone has a terrible accident in a swimming pool, it doesn’t affect the neighbor’s swimming pool,” to illustrate the interconnectedness of financial systems. Elly Aiala, Chief Compliance Officer at Boost Payment Solutions, noted that fraudsters are increasingly employing technological advancements such as generative AI to optimise their strategies, creating ongoing challenges for institutions in maintaining security.

Overall, the “What’s Next in Payments” series from PYMNTS encapsulates a pivotal year of transformation in finance, with emerging technologies, particularly AI, reshaping business practices, consumer expectations, and the overarching dynamics of the payment ecosystem.

Source: Noah Wire Services