Fed’s Bowman Says AI Is Blessing and Threat to Bank Security

Artificial intelligence is a double-edged sword for the financial institutions that power your customer payment plans. Federal Reserve Governor Michelle Bowman recently highlighted that while AI helps lenders catch fraud faster, it also gives criminals sophisticated tools to attack the banking system. For retailers and service providers, this means the 'plumbing' behind your financing programs is under constant evolutionary pressure. Lenders are currently caught in an arms race. They are using AI to streamline credit approvals and improve customer service, but they are also fighting off AI-generated phishing attacks and data breaches. For your business, this translates to a heightened focus on data security and vendor management. As banks face more pressure from regulators like the Fed to secure their systems, you may see changes in how you handle customer data or how financing applications are verified. The goal for lenders is to use AI to make the 'yes' come faster for your customers while ensuring that 'yes' isn't based on a fraudulent identity. Expect your financing partners to implement more robust multi-factor authentication and stricter data-sharing protocols. Staying ahead of these security trends ensures that your financing options remain a reliable tool for driving sales rather than a liability for your customer database.

Source: PYMNTS

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