Most financial services companies are using AI to look inward. I believe the real opportunity is looking outward toward the customer.
After 36 years in payments and banking, I’ve noticed something about how our industry discusses artificial intelligence. We talk about it almost exclusively as a back-office efficiency tool for sharpening risk models or automating processes. These are legitimate applications, but they reveal a fundamental orientation: the primary goal of AI is to improve the operating efficiency of their legacy environments rather than focusing on improving their customers’ experience.
The inward AI vs. outward AI divide
Payment companies often view AI as a means of enhancing efficiency. They use it in risk management to identify fraudulent transactions or suspicious merchant behavior. They apply it to underwriting to speed up merchant eligibility decisions. They implement chatbots to answer customer service questions more quickly. They leverage AI coding tools to speed up software development. Each application of the technology centers on internal optimization. How can we reduce losses, process applications faster, and handle customer support with fewer people?
The approach is not a bad one; companies need to implement technologies in ways that increase their profit. But when the primary motivation for implementing AI centers on putting more income into the profit bucket rather than leveraging it to improve customer experience, we’re missing the technology’s truly strategic and transformative potential.
The alternative is an outward-looking approach. It’s one that asks, “How can AI make our customers’ lives better?” Not as a secondary benefit of internal improvements, but as the primary design goal. While the distinction between the two is subtle, it results in very different outcomes.
What outward-focused AI looks like
The business side of payments is fundamentally about data. It’s about taking data from one point, moving it to another, manipulating it in specific ways, and generating outputs. We’re not physically moving dollar bills from one entity to another. This means AI applications generate a wide range of benefits for the payments industry, perhaps more than for almost any other industry. But most companies miss an important opportunity to use AI outwardly. If AI is designed to focus outward on customer experience rather than inward on operational efficiency, you create entirely different value propositions.
Instead of using AI exclusively to minimize customer service interactions, you can build systems in which AI-supported customer interactions generate value for the company. With every merchant question, the AI system learns more about that business’s context. Every transaction provides data for the AI, helping surface insights merchants wouldn’t discover on their own. Rather than being drained by each customer engagement, the platform becomes more attuned to customers’ wants and needs, thanks to AI.
AI can solve your customers’ problems in ways that payments have traditionally been unable to address at scale. Problems such as business optimization insights, marketing strategy guidance, inventory management, and financial planning. These are areas where micro-businesses (think barbers, personal trainers, or food trucks) desperately need help but can’t afford traditional services or software packages consulting . Outward-facing AI strategies don’t just make payment platforms more operationally efficient on the backend; they also enable them to serve their customers in new ways that weren’t profitable before.
Consider a food truck owner reviewing her weekly transactions. An inward-facing AI might flag potential fraud patterns or optimize processing fees. An outward-facing AI might notice that her average ticket size increases 22% on evenings when she posts on social media, or that sales dip sharply when rain is forecast. Instead of merely processing payments, the platform could proactively suggest adjusting hours, bundling items, or promoting specific menu combinations based on historical transaction data. For the first time, the payment platform becomes a business enhancement and not just a processor.
Over time, that kind of intelligence changes how the merchant views their provider. It’s no longer just a utility that deducts a fee from every transaction. It becomes embedded in decision-making. When a payments tool solves more business-related problems and helps drive revenue instead of simply processing it, the relationship shifts from transactional to strategic.
The choice ahead
I don’t expect most legacy financial services companies to pivot to outward-focused AI. They have too much invested in current approaches, too many organizational barriers, and too much quarterly pressure to show immediate returns.
But that’s precisely why there’s an opportunity for other payment companies that are taking a different approach. The micro-businesses that many legacy payment platforms have left behind need better financial services tools. They need fundamentally different solutions, and outward-focused AI makes those solutions possible for the first time.
AI is already transforming payments and financial services forever. The question is whether that transformation will primarily benefit the companies deploying AI or the customers they serve. The companies that choose to use AI to better serve their customers will ultimately accomplish both goals. That’s the opportunity most of the industry is missing. As AI capabilities accelerate, the gap between inward-focused and outward-focused platforms will only widen. The winners won’t just be more efficient; they’ll be more indispensable.
