Adyen’s CEO was surprised at how effective AI was to prevent fraud

Global payments unicorn Adyen is looking into how artificial intelligence can boost its payments offering, highlighting how the tech can improve the industry as a whole.

The Dutch FinTech company went public last year after having raised a massive $250m Series B round in 2014, the biggest deal raised by a FinTech company in the Netherlands between 2014 and the third quarter of 2019.

But more is to come and it seems as if AI will play a big role in Adyen’s future.

“The benefits of AI are real,” Pieter van der Does, CEP of Adyen, told VentureBeat at the Slush technology conference in Helsinki.

However, initially the tech leader was cautious about using AI.

That changed after Adyen developed an AI-powered fraud detection tool that quickly exceeded the unicorn’s expectations, empowering it to better leverage the large number of data points its systems absorbs and to make better decisions.

van der Does explained that the AI can better detect and reduce the number of false positives, meaning more transactions can take place. Ultimately, that means more money in the company’s pockets.

“Risk in payments is a way to raise authorization dollars,” he said. “If you allow the transaction, your merchant has more revenue than [they] would have had with the old system. That is good for everyone.”

Adyen’s venture into this area is just the last example of AI being used by FinTech companies.

AI has already had a big impact on stock-trading, payments, cybersecurity, risk management and a slew of other areas affecting the health of financial services.

Other companies, like Theta Lake, the RegTech startup behind a communication monitoring platform, use AI and machine learning as a cornerstone to their offering.

For RegTech companies, using AI means that they can handle the growing regulatory complexities financial services firms face on a daily basis better and more efficiently than most legacy systems could.

Chris Brannigan, CEO of Caspian, the anti-money laundering solution provider, recently told FinTech Global that the next few years will see less mystique around machine learning and, like Theta Lake’s founder Devin Redmond, Brannigan argued that AI will help businesses get rid of sluggish legacy systems.

While he noted that some banks have been disappointed by their initial attempts to leverage machine learning to prevent financial crimes, Brannigan was optimistic that these trepidations would subside as the benefits of AI became more evident and the teething problems are ironed out.

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