AI is revolutionizing industries. Here’s what that means for consumer trust.

By Matthew Driver, executive vice president, head of Services, Asia Pacific, Mastercard

The payments industry has always been a highly dynamic sector that requires players to stay ahead of the curve, not only for the scope of financial empowerment and economic reach it delivers but also for the financial risks it must continuously safeguard against.

It is therefore no surprise that the advent of big data, data analytics, and disruptive technologies such as generative AI have brought in sweeping changes and opportunities to reinvent critical business areas. Be it fraud detection, enhanced risk management, payment optimization, personalized customer experiences, or business process automation, the adoption of innovative technologies is unleashing previously untapped potential of the payments industry.

As these innovations are applied across the payments ecosystem to better engage businesses and improve customer experiences, we’re able to reinforce the trust in the system. At the same time, as is the case with every new disruptive technology, there are pitfalls in their application which, if not managed carefully, can quickly erode trust of users and potentially slow down innovation and progress.

Understanding the landscape of opportunities these technologies offer sets the stage for a deeper exploration of how trust and innovation intertwine and shape the future of the payments industry.

Trust and innovation: A delicate balance

A recent report titled “Raising trust and innovation together in the Asia Pacific (APAC) region,” conducted by the Harvard Business Review Analytic Services in association with Mastercard, underscored the importance of trust as a catalyst to innovation. It also illuminated what APAC organizations are doing to advance their innovation agenda while navigating the challenges of building trust with customers, employees, and other stakeholders in a complex world.

Consistently, the business leaders interviewed emphasized that earning customer trust enabled their companies to take innovative leaps, risking new ventures to create and enhance products while laying out the key practices that have helped them maintain and deepen this trust.

At its core, trust operates on multiple levels, serving as the catalyst for transformative change. When customers trust a business, it empowers the organization to pioneer groundbreaking initiatives, embracing risk to craft new products and refine existing ones. Simultaneously, an organization with strong levels of employee trust is well-placed to foster an environment of innovation, as individuals have the confidence that they are supported by their firm, their management, and their colleagues. This means that they are more likely to seize opportunities to innovate and challenge the status quo and, in the process, risk a degree of failure without fear.

While the balance between trust and innovation emerges as a critical lever for progress, the role of transparency in cultivating and maintaining this trust cannot be overstated.

Cultivating trust through transparency

Transparency and accountability are themes that came up frequently in the report. Many of the business leaders interviewed placed a strong emphasis on transparency when it comes to their management and stewardship of customer data, including the necessary, if sometimes difficult, process of taking full accountability when issues arise.

Reckless actions by even a few entities, especially in sectors like payments and banking, can undermine consumer trust industry-wide and put a halt on progress. It’s therefore imperative that all players in the field commit to responsible and ethical technology use to foster a secure and trustworthy ecosystem.

This is something we’ve sought to be explicit about at Mastercard through our Data Responsibility Imperative, which clearly lays out the rights of individuals in relation to the ownership of their data, as well as its sharing, use, privacy, and security. In addition, Mastercard has a formal AI governance process that ensures that AI is ethically developed and used with data responsibility and privacy-by-design principles at its core.

Earned, not given

As we recognize transparency’s pivotal role in building trust, it becomes clear that trust in the digital age is earned, not given. This principle guides us toward understanding the fundamental value of responsible technology use in securing consumer confidence.

Safeguarding consumer trust in an era increasingly dominated by sophisticated algorithms and artificial intelligence is more critical than ever. However, improvements in the customer experience driven by advanced technologies alone won’t be sufficient to cultivate trust, at least not in the long term. It is crucial for companies to be explicit and transparent about how these technologies are employed and to involve consumers in the journey.

By collectively adopting an approach that emphasizes clear governance, especially regarding how customers’ data is used, we can create a level playing field. This allows for ethical competition and where technology advances in such a way that it enhances human experiences without compromising privacy or security.

The payments industry is at the forefront of these innovations and has a crucial role to play to ensure a foundation of trust so that the implementation of advanced technologies can continue apace. It also serves as a reference model for other industries that want to maximize the benefits of new technologies for strong business outcomes while ensuring that their stakeholders trust this journey of transformation

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