SunTrust's AI investment fuels a future of payments by digital assistants
Banks are facing potential disruption from digital assistants offered by Apple, Amazon and Google — and are pouring money into machine learning to provide their own options for automating consumers' financial lives.
SunTrust Banks in Atlanta, for example, has made an investment in the payment technology company Payrailz to expand the fintech's development of artificial intelligence for transactions and budget management. Payrailz has built technology that uses application programming interfaces, artificial intelligence and cloud hosting to create an automated concierge service that becomes more interactive over time.
The technology is supposed to make personal financial management and electronic bill pay work similarly to home automation systems that allow users to turn on lights or change the temperature based on observed habits — when the user is home, which rooms they use and so forth. The same AI can be applied to recurring bills and expenses.
The system, which is just coming to market, is designed to predict based on past and current data that a consumer may want to make a specific payment at a certain time, according to Mickey Goldwasser, a vice president at Payrailz. SunTrust will serve in an advisory role for Payrailz, he said.
SunTrust would not make an executive available for an interview or disclose the size of its investment.
Payrailz connects to banks’ customer relationship management systems to support recurring bills, one-off transactions and charitable donations by pointing out money left over and charitable options. Payments for contract workers is another use case.
Payrailz is targeting banks and credit unions with the technology, hoping to serve a need to keep customers from fleeing to fintechs, personal financial management apps or mobile payment companies. Payrailz is particularly interested in smaller banks, which are most vulnerable to Venmo, PayPal and other P2P apps. Even though there is some fear of job displacement, banks are warming to the myriad uses for AI to support transactions, security and other financial services.
“We’re all on information overload, and we’re always on the move,” Goldwasser said. “It’s helpful to have this information and the ability to act on it.”
Payrailz also has an eye on the impact of personal assistants such as Siri, Alexa and Google. The technology is not used to “command” payments now, but it could be a natural progression — especially for Amazon, which links its Echo devices to users' Amazon e-commerce accounts. Payrailz hopes to be positioned as an alternative when personal assistants become full-fledged portals for financial activity.
“These assistants are cool. … They do things for us. It’s not necessarily that we want to make a payment an afterthought, but how can you turn these obligations over to an assistant to make it easier,” Goldwasser said.
The financial services market is bracing for the next movement in chatbot and other assistant technology, which will expand use from informational to functional, according to Tiffani Montez, a senior banking analyst at Aite. “People are asking a lot about that, about how a chatbot can be baked into a mobile banking application … and how they can be asked to make a payment.”
The advancements are coming in natural language processing, which can be combined with AI and data to make the conversation more proactive, allowing a bank, financial institution or technology company to reach out to a consumer to inquire about a pending transaction with full knowledge of savings, funds, outstanding balances, other bills and how the user usually manages the payment, Montez said. “It’s part of a next gen of PFM and payments where the developers are starting to think about financial wellness.”