AI’s Only Threat Is to Businesses That Don’t Leverage It

The utility of artificial intelligence (AI) is often forgotten amid the hysteria swirling around it.

But in a world where technology is advancing at an unprecedented pace, that utility can be transformative.

“When you think about financial services, the [immediate use case] is obviously fraud protection,” Jeremiah Lotz, managing vice president, digital and data at PSCU, told PYMNTS.

That’s because fraud detection and prevention is, and will continue to be, a major concern for financial services providers.

And while tapping AI-powered tools to boost fraud defenses isn’t necessarily a new approach, Lotz explained that today’s generative AI solutions can “take things to the next level by looking at deeper, more personalized experiences” in order to support identity verification and transaction authorizations, as well as flag suspicious behavior by better analyzing behavioral patterns.

Generative AI has the potential to revolutionize the way financial services are delivered, and it is already being used in a number of different ways.

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Lotz believes that generative AI holds exciting potential for use across consumer engagements, customer support, and personalization, helping provide more personalized and natural interactions between consumers and financial services providers.

“From a credit union or financial services perspective, it gives us that extra edge to be more personable in those interactions where it’s not just a ones and zeroes response — whether it’s fraud, it’s new marketing opportunities, new payment capabilities, or something else, there’s more opportunity to engage more naturally,” Lotz said. 

Within the payments environment, generative AI can similarly have an impact by improving speed, security, convenience and personalization through real-time analyses of behavioral preferences around the payments occasion.

But the potential uses of generative AI don’t stop there.

Lotz explained that the pairing of generative AI with voice and speech capabilities would allow for a whole new world of interactive, intelligent and conversational commerce.

“Generative AI, whether over voice or text, will give a more unique conversation and get into more of a dialogue of not just, ‘Do you offer a savings account?’ but allowing users to say, ‘I’m looking to save money for my 8-year old for college,’ and have the bot respond with the right types of savings or investment vehicles, not just a static list,” he said.

This innovative combination of voice and generative AI will speed up “daily life tasks,” he added, by providing users with recommendations that are increasingly both tailored to their needs and dynamic based on the occasion’s context.

“Is there a role for generative AI and voice to be combined? Absolutely,” Lotz said.

AI Will Thrive by Augmenting and Adding, Not by Replacing 

The potential uses of generative AI are vast, and both businesses and consumers should expect to see even more advancements in the financial services industry in the coming years. That’s because revolutionary innovations like generative AI tend to transform both the economy and change the realities of daily life, Lotz said.

“There’s great opportunity for augmenting and adding to the intelligence of what we are already doing and using today — that’s really the biggest opportunity, particularly in repetitive environments where it can make things more efficient,” he said.

But as with any new technology, there are concerns about risks and challenges.

Lotz acknowledges that there are concerns about hallucination — erroneous responses that seem credible — when using generative AI for external data. Despite these concerns, he believes that the potential benefits of generative AI are too great to ignore.

As PYMNTS has previously written, regulation can protect consumers while also ensuring a hands-off approach to growth and innovation by enacting guardrails around the provenance of data used in AI’s training data sets, making it obvious where an AI model’s output is being generated from and working to flag synthetic and hallucinated content.

Lotz said organizations must consider security and privacy when using AI tools to improve their workflows and provide better end-user experiences.

Still, he doesn’t see the technology replacing human interactions any time soon.

“AI is a great way to evolve how we in financial services interact with consumers — but it’s not how we replace human interactions. In the ideal world, it just makes everyone’s job more efficient by allowing them to focus more on high-valued areas. Human knowledge and human capital are still the most valuable thing in the room,” Lotz said.

The only threat, he said, is to businesses who aren’t able to leverage the technology themselves.

“AI is a tool — but it’s one that everyone should take time to learn and play with in order to explore how they can best take advantage of its capabilities,” Lotz said.