(Gen)AI in the minds of business leaders
The launch of ChatGPT, the first widely available and user-friendly Large Language model, in November 2022 to the general public marked a pivotal moment for Artificial Intelligence.
This at-scale accessibility and proliferation of AI capabilities has had a profound impact not only on consumers’ daily lives, but created a unique opportunity for businesses to drive transformative impact within their organizations. The key unlock for driving meaningful business transformation, however, comes from taking an end-to-end view on business processes, and harnessing the combined power of GenAI, Predictive AI, and good old-fashioned automation.
Some large FIs have even publicly set targets on the value that (Gen)AI and automation will deliver:
- RBC, Canada’s largest lender, stated at a recent investor day that by 2027, it expects its AI investments to drive $700 million to $1 billion in enterprise value. “GenAI lets us take the capabilities of the top 10% and expand them to the top 80%,” CEO Dave McKay said.
- JPMorgan Chase President and COO Daniel Pinto stated that the bank expects $2 billion in AI-related upside as they looked to equip more than 200,000 workers with a suite of GenAI tools.
(Gen)AI as a catalyst in the payments industry
In the world of payments, (Gen)AI deployment is applicable across a range of business functions and payments-specific workflows. By combining (Gen)AI and automation, where most applicable, organizations are able to develop sophisticated capabilities.
BCG has substantial experience supporting clients across a wide range of (Gen)AI workflows that have delivered significant benefits. Below are some notable examples.
- Tech and engineering: developer productivity: Engineering productivity gains unlock 10% to 20% cost savings while raising quality and developer engagement.
- Customer support: call center efficiency: 75% to 85% volume contained with reduced average handling times and improved first call resolution, resulting in 30%+ cost savings.
- Marketing: end-to-end campaign execution: Three-fold increase in content throughput, 20% to 40% reduction in creative costs and 60% reduction in content creation and approval FTEs. Furthermore, there is a broader impact to the marketing organization of the future with a shift in the roles/talent, overall effectiveness increase and reduced dependence on creative agencies and their timelines.
- Sales: augmented, assisted, and autonomous selling: 30% to 40% uplift in corss- and up-selling, and up to 40% reduction in churn seen across industries.
- Data and analytics: data management: 50% reduction in data governance workflow time (including onboarding datasets to a series of controls across metadata and lineage), accelerated speed-to-compliance coverage, and 20% operating expense savings on current data governance teams.
- Risk and Compliance: KYC: KYC productivity gains of 30% to 40% alongside improved capture rates and stronger risk management.
- Risk and Compliance: enhanced fraud management: 20% to 30% flattened cost curve from reduced net fraud losses (specifically chargebacks) for issuers, 40% reduction in false positives rate in cards, and reduction in application fraud losses.
- Risk and Compliance: credit and underwriting: Up to 50% improved time-to-yes, 30% to 40% run-rate cost efficiencies and reduced time-to-decision, while increasing the predictive power of the risk assessment and hence increased credit loss reduction.
- Collections: 10% to 20% reduction in collection operating costs, 5% to 10% net charge-off reductions, and increase in net promoter score and customer retention, assuming a holistic set of available outbound and inbound channels.
The evolution of (Gen)AI is unlocking transformative potential across the payments industry. Forward-thinking payments companies that embrace this journey today stand to redefine efficiency, revolutionize the customer experience, and transform business models. The real question is, where are you on the journey and what is holding you back?
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