AI troubles, Mastercard layoffs: Top tech news August 2024

Article by American Banker

In August’s roundup of top tech news: Banks and retailers wrestle with the unseen consequences of artificial intelligence, Mastercard lays off roughly 3% of its workforce and more.

What are the implications of AI in banking?

Bank technology executives honored on a list of artificial intelligence leaders released in August see no letup in their companies of AI investment and effort, and are focused on practical use cases like fraud detection and personalization.

Krish Swamy, chief data and analytics officer at Citizens Financial Group, expects the bank’s investments in AI in 2025 and 2026 will be higher than in 2024. He stated, “We will do fewer things and do them really, really well versus trying to do 20 different things and expecting them to take flight.” Click here to read the full article.

What lessons were learned from Zions Bancorporation’s core upgrade?

The core transformation that consumed Zions Bancorporation for more than a decade has come to a close. This massive undertaking by the Salt Lake City regional bank was “a blockbuster deal,” said Brad Smith, a partner at Cornerstone Advisors.

Smith noted, “Most people from the outside would say it was the first successful large-scale U.S. bank core transformation from an international core provider.” Click here to read the full article.

What are the legal challenges facing AI in customer service?

Two recent lawsuits challenge companies that use artificial intelligence in their chatbots and call centers, as many U.S. banks do. In one case, a customer was assured by an airline’s generative AI-based chatbot that he had 90 days to apply for a bereavement discount, which turned out to be incorrect. A civil resolution tribunal ordered Air Canada to award the customer the discount and pay fees.

In another case, customers sued Patagonia for using AI to record and analyze customer-support calls without their consent. Click here to read the full article.

What does Mastercard’s layoffs indicate about payment revenue?

Mastercard plans to lay off about 3% of its employees by the end of September, despite posting earnings that beat analysts’ projections. The card network stated that the cuts would unlock capacity for investment in growth areas. Click here to read the full article.

How are fintechs navigating their choices?

Fintechs may conclude that integrating directly with banks is the way to go after the Synapse bankruptcy. However, the choice between using a banking-as-a-service middleware provider or going direct is complex. Click here to read the full article.

Is there a tradeoff between accuracy and fairness in AI-based lending?

As banks and fintechs debate the use of AI in lending decisions, one point of contention has emerged: Does there have to be a tradeoff between accuracy and fairness? Click here to read the full article.