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Financial companies have long used analytics and machine learning to predict and counter fraud, and now companies are using AI technologies to inspire loyalty in their customers and increase customer retention.
Mastercard is one of the most prominent financial services giants using AI broadly. Since Mastercard's 2017 acquisition of technology vendor Brighterion, the credit card company has invested heavily in AI for fraud prevention.
Mastercard both uses and sells AI-powered fraud prevention technology. The company said its AI tech helps keep customers happy and their finances secure.
In a Q&A, Sudhir Jha, head of Brighterion and senior vice president at Mastercard, discusses how Mastercard uses and sells AI services.
What notable improvements and changes has Mastercard made to its AI models or products for fraud prevention and other applications recently?
Sudhir Jha: For over a decade, Mastercard has leveraged AI for fraud and security across the customer and transaction lifecycle on transactions that go through the Mastercard network. We have honed our AI models to accurately predict fraud or risk with the intention of improving customer experience given changing customer behavior and fraudsters' techniques.
This ability to develop and deploy highly personalized models along with the capability to derive intelligence from large transactional data sets is a key differentiator of Mastercard AI technology. Mastercard itself does not have credit risk on the cards issued on our network; we enable financial institutions to more effectively manage credit risk with our Credit Risk Suite built with Mastercard AI technology.
How can financial institutions use AI to inspire loyalty in their customers?
Jha: We are currently finding that delivering on improved customer experience is even more important, whether it's approving higher levels of genuine transactions, or increasing credit limits. Customers expect a seamless experience across these events, such as making payments online or in store with fewer genuine transactions declined, or when requesting credit limit changes.
It's critical for financial institutions to ensure continuous improvement of the customer experience by reducing false positives while managing risk. AI enables financial institutions to do that. This improvement in customer experience drives more engagement and loyalty as customers' satisfaction increases with the existing financial institutions where they have accounts.
Sudhir JhaHead of Brighterion and SVP, Mastercard
What AI products does Mastercard itself use for fraud prevention?
Jha: Mastercard uses its own proprietary AI technology to reduce transaction fraud. Our AI technology, developed through our acquisition of Brighterion, enables us to leverage AI on billions of events every year -- accurately, at scale and in a timely way -- optimizing the customer experience and mitigating billions of dollars of fraud every year.
What stages of the customer lifecycle benefits the most from AI? Why?
Jha: Financial institutions leverage AI throughout the customer lifecycle across credit applications and onboarding, improving experience for existing customers and in collections optimization. AI enables higher application approvals while mitigating credit loss. AI helps improve credit limits and higher transaction approvals across online and in-store transactions and minimizes credit loss for existing customers. In collections, the focus is on improving customer experience and streamlining the process.
There is benefit across all of these stages. Financial institutions leverage AI depending on their strategy, state of their business and customer trends. We are working with customers globally across these different stages.
This interview has been edited for clarity and conciseness.