AI-based advanced analytics is making credit, debit cards smart

For example, Philadelphia-based fintech firm cred.ai, which launched its ‘Unicorn Card’ two years ago, uses a credit optimizer tool. The card was licensed by the payment network Visa and issued by the Wilmington Savings Fund Society, FSB. The Credit Optimizer tool uses AI algorithms to improve a user’s loan-to-credit ratio, which is up to 30% of the FICO score that evaluates a person’s creditworthiness in the US. Apple, too, uses AI to set a user’s credit limit on the Apple Card.

Nearby home, Gurugram-based fintech firm OneBank has developed a card to connect various banking systems. The company, which counts 60 corporates among its partners to provide cards on employee’s salary accounts, claims that the card brings all employee’s payments into one. OneBank’s card uses the company’s smart platform to integrate employee benefits such as balances on a single card. When the card is swiped, it decides in real time which balance to use for making payments.

OneBank has already partnered with RuPay and Visa and has said that its “AI card” will hit the market in the next four to six weeks.

Vibhor Goyal, Founder and CEO, OneBank, said that the problem with banking right now is that various systems like credit cards, prepaid cards, etc. are not connected. According to him, when banks issue credit cards on fixed deposits (FDs), for example, the system is manually programmed to allow customers to break limits. “Those two systems are not talking to each other. It is a manual process to settle bills from FD to credit card, even in the event of any default.” “Our AI-powered systems enable this fragmented banking system to communicate in real time,” he added.

The card can also connect to the company’s human resource (HR) and finance platforms and make recommendations based on them. For example, it can recognize a recurring payment that a user makes every month and start suggesting that payment at a set time on a monthly basis.

Goyal also said that AI helps in enhancing the security on the card. AI cards do not have magnetic stripes, instead the card data is embedded on a Europay, MasterCard, Visa (EMV) chip. When a transaction is made, the AI ​​records the location data, and takes into account information such as user travel information, employment profile, etc. to detect potential fraud.

Similarly, Bengaluru-based Synaptic AI said this January that payment provider UniCards would use its AI algorithms to provide its users with a “sophisticated application process”. “Our credit decision-making platform allows UniCards to experiment, test, and learn rapidly, and over time, build the best decision-making strategies for your customer segments, balancing growth and profitability ,” said Pankaj Kulshrestha, chief executive of Synaptic.

According to Mihir Gandhi, Partner, Payments Transformation at PwC, some of the leading private sector banks in India are also working on using AI to predict payment methods that would be best suited to make payments.

“Even if you look at non-financial companies, such as Amazon, in which my payment details are saved. When I am transacting on Amazon, it suggests a preferred payment option,” Gandhi said.