Payments Leaders Need AI Controls They Can Explain in 24 Hours

Slower initial deployment of AI is less costly than a scaled failure, Flagright Co-founder and CEO Baran Ozkan writes in a new PYMNTS eBook, “AI Runs Payments. Governance Decides What Happens Next.”

From where I sit at Flagright, AI governance usually breaks down in the gap between a model output and a business decision. Teams spend a lot of time discussing model accuracy and far less time defining who owns the decision, what evidence must be logged, when a human has to step in and how a change gets approved. In payments, weak governance does not fail quietly. It scales across approvals, blocks, investigations and customer outcomes. The real issue is rarely “bad AI.” It is unclear operating discipline around artificial intelligence.

The Hardest Trade-Off Between Speed and Governance

The hardest trade-off is resisting the urge to automate before you can simulate. Everyone wants faster alert handling, lower manual workload and quicker decisions. But if you cannot replay historical cases, compare outcomes and roll back safely, speed just lets you operationalize mistakes faster. We have repeatedly chosen slower initial deployment in exchange for staged release, version control and explicit human override points. That can feel expensive in the short term, especially in fast moving payments environments, but it is much cheaper than explaining a scaled failure to regulators, customers or your board.

Governing AI When Data and Models Depend on Third Parties

You can outsource tooling, but not accountability. Every external model, screening source, identity signal or data provider should be treated as a governed dependency. That means clear performance expectations, change notification rights, auditability, fallback plans and independent validation inside your own environment. The mistake many firms make is assuming vendor assurance is enough. It is not. Third-party AI introduces model risk, vendor risk, data provenance risk and concentration risk at the same time. Good governance starts by assuming that any dependency can change underneath you.

On Governance Decisions

I wish more teams turned policy into something operational and versioned much earlier. Governance should not live in slide decks or committee notes. It should live in rule level investigation logic, approval thresholds, evidence standards and a record of what changed, when and why. Once you do that, governance stops being abstract. It becomes testable. You can replay past alerts, challenge outcomes, and prove that your controls behave the way your risk appetite says they should. That is when AI stops being a black box and becomes a governable control.

What Boards and CEOs Should Be Asking About AI Governance

Most boards still ask whether AI is being used responsibly. That question is too soft. The better questions are: Where is AI making or shaping customer impacting decisions today? Which decisions are fully automated, which are recommendation only and where is human review mandatory? How quickly would we detect drift, bad data or a poor release? What is our rollback plan? And if a regulator or major partner asked us tomorrow to justify our AI controls, what evidence could we produce in 24 hours? In payments, the winners will not be the firms that automate the most. They will be the ones that can automate confidently and explain their decisions under pressure.