Credit Shift News: Gen AI in Banking, Credit Card Transaction Fees, AI Ethics and The Human Touch

Paul Sweeney (CSO) and Cormac O'Neill (CEO) cover industry news highlights and the adoption of AI in the banking sector.
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🎙 Sound Bites:
"For every 1% drop in profitability, it could increase payment terms by seven days."
"Merchants will be able to charge different prices to customers based on which credit card they use."
"LLMs raise the floor, not the ceiling."
🎙 The hosts explore the concept of Gen AI and its potential impact on various industries. The conversation highlights the importance of trust, ethics, and the human touch in the adoption of AI technologies.
🎙 Key industry news covered includes a default by Thames Water's parent company, potentially leading to restructuring or collapse, and Alliance Trade's report linking profitability drops to extended payment terms.
🎙 A significant highlight is Visa Card and MasterCard agreeing to reduce US transaction fees, which could save merchants over $30 billion over five years, alongside enabling merchants to charge customers based on their choice of credit card.
🎙 They also discuss the rise of 'buy now, pay later' schemes, particularly focusing on Klarna's success in ensuring timely repayments and reducing the percentage of debts referred to collection agencies. Despite skepticism about the necessity of early repayments in interest-free setups, they note Klarna's strategic implementation of late fees to encourage on-time payments.
🎙 The conversation then shifts to the broader implications of AI in finance. Despite some enthusiasm, there's a cautious note about AI's rapid evolution and the necessity of strategic, rather than reactionary, adoption within the banking sector.
Takeaways
➡Company defaults and payment terms are key factors in the credit industry.
➡Visa Card and MasterCard have agreed to cut US transaction fees, which will save merchants billions of dollars.
➡Gen AI has the potential to augment virtually every job in the banking sector.
➡Trust, ethics, and the human touch are important considerations in the adoption of AI technologies.
Sources
www.theguardia...
www.credit-con...
www.irishtimes...
www.credit-con...
sytaylor.subst...
reports.jpmorg...
www.americanba...