AI can provide valuable tools to use in decision-making, but you’d best be able to explain how they work. The CFPB is taking an aggressive approach to oversight of bank lending practices that use ‘black box’ credit models. The machine learning algorithms that drive these decisioning engines are commonly ‘trained’ on historical data that may reflect inherent biases. Explainable AI (XAI) is all about demystifying these models by creating readily understandable descriptions of how they work.
Accrue Savings flips the BNPL model around, encouraging consumers to save for purchases using merchant-funded incentives. Instead of making offers at the point of sale as with the BNPL model, Accrue appeals to consumers at the top of the sales funnel while they are still researching products on a merchant’s site. By offering a ‘save-to-pay’ plan with incentive discounts included, consumers are able to plan their purchases and merchants are able to attract business with lower advertising costs, using the savings used to fund the discount program.
Customers expect quality financial advice from their bank or credit union. A recent JD Power survey shows that satisfaction levels can be significantly improved by offering financial wellness tools in conjunction with personalized advice and guidance. However, many banks are failing to meet these expectations, causing satisfaction scores to fall over the past year.
Payments are being transformed by a number of disruptive innovations. Five of those include: broader adoption of cryptocurrencies led by digital banks and Fintech companies, increasing adoption rates of SaaS platforms, the rapid growth of BNPL services, frictionless payments using contactless technology, and the rise of ‘super-apps’ that allow customers a wide range of experiences within a single application. Expectations are that these trends will continue their rapid pace of expansion.
A crypto wallet extends the digital wallet concept by allowing the storage of cryptocurrencies and other digital assets, and will eventually become the centerpiece of everyone’s financial life. These wallets may contain digitized assets such as bonds, equities, real estate, funds, partnerships, derivatives, and other investments. Financial institutions would be well-advised to begin including these wallets in their strategic planning process.
