The software engineers and data scientists at Visa Inc (NYSE:V) developed and introduced an AI-based Tool to approve or deny card transactions during a network outage or disruptions caused by natural calamities.
Analyses past spending behavior
The AI-based system analyses the past spending behavior, relations with the bank, location, and timing of the transaction to deny or approve a debit or credit transaction. It acts like how the neurons in your brain activity to respond to a particular situation. The same technology – Smarter Stand-In Processing is being used in facial recognition, voice-enabled digital assistants, and self-driving cars. Visa already owns a patent for one and applied for the other two.
Network outages affect millions of transactions annually
Banks and Merchants are losing billions of revenues annually because of declined transactions caused by network outages or disruptions. The innovative AI-based tool introduced by Visa will solve all these problems. It considers cardholders’ past behavior in deciding to approve or a declined transaction in the event of a network failure or disruptions. The need to make a call to the bank to resolve the issue is eliminated with the new tool.
The new AI-powered and the advanced tool considers the crashed bank networks caused by natural disasters or buggy software in arriving at a decision either to grant or decline a transaction.
New AI tool for banks from October
Visa’s backup system will be available from October 2020 for the banks that signed up for the service. President (Technology) of Visa, Rajat Taneja, said introducing an AI-based tool is a crucial step to mitigate the impact of a network outage or disruptions on the volume of transactions.
The Smarter STIP gets activated automatically on detecting that the bank network is either unavailable or offline. A rules-based ML (Machine Learning) is used in the older version of STIP as a backup to manage the transactions in network disruption. The newly developed and advanced deep learning model is trained to verify billions of data points related to the cardholder before deciding to either deny or approve the transaction. In the validation tests, the AI-based tool achieved 95% accuracy in making a decision.
Spending on AI at $7.1 billion
Banks expect to spend a huge $7.1 billion on AI-based solutions in 2020. The spending on AI expects to reach $14.5 billion in 2024.