{"id":13298,"date":"2023-11-08T00:00:00","date_gmt":"2023-11-08T00:00:00","guid":{"rendered":"https:\/\/fortispay.com\/in_the_media\/experts-on-ai-in-finance-kevin-shamoun-svp-at-fortis\/"},"modified":"2023-11-08T00:00:00","modified_gmt":"2023-11-08T00:00:00","slug":"experts-on-ai-in-finance-kevin-shamoun-svp-at-fortis","status":"publish","type":"in_the_media","link":"https:\/\/fortispay.com\/in_the_media\/experts-on-ai-in-finance-kevin-shamoun-svp-at-fortis\/","title":{"rendered":"Experts on AI in Finance: Kevin Shamoun, SVP at Fortis"},"content":{"rendered":"\n

In a wide-ranging interview, Techopedia speaks with Kevin Shamoun, senior VP at Fortis, about the challenges and opportunities for AI in financial services. From fraud to predictive technology, from customer services to the inevitable day something goes wrong in the real world, there is plenty to think about for 2024 and beyond.<\/em><\/p>\n\n\n\n

Techopedia speaks with Kevin Shamoun, senior vice president (SVP) at payment solutions provider Fortis and Vice-Chair of the AI Committee at the Electronic Transactions Association, about the use of artificial intelligence<\/a> (AI) in the financial services industry.<\/p>\n\n\n\n

We also delved into the emergence of bad actors using generative AI<\/a> to commit fraud, but how AI can be used to help predict and identify fraud.<\/p>\n\n\n\n

On Generative AI in Finance<\/h2>\n\n\n\n

Q: How are companies in the financial services industry using AI?<\/em><\/p>\n\n\n\n

A: Right now, it\u2019s mostly not generative AI being used; it\u2019s mostly the technology that\u2019s been around for a while, such as machine learning<\/a> \u2014 models that are being trained around risk tolerances, and so forth.<\/p>\n\n\n\n

In financial services, the use of generative AI is really going to be around the service aspect of it: what can we do for chatbot<\/a> automation? What can we do for phone call automation? What are the useful tools to respond to people\u2019s service needs?<\/p>\n\n\n\n

The challenge with AI in the financial sector going forward becomes if you use AI to try to predict things \u2014 like \u201cwhat\u2019s going to happen in the stock market?\u201d.<\/p>\n\n\n\n

If it\u2019s generative AI, that\u2019s one thing because people have always had their models for trying to predict the stock market.<\/p>\n\n\n\n

But algorithms are thinking about and processing on their own \u2014 how are they making decisions to buy or sell something? In the financial sector, that becomes a concern because it could have real financial consequences for a company.<\/p>\n\n\n\n

What if it does something wrong, and you have to go back to inspect what it did? \u2014 it\u2019s already too late.<\/p>\n\n\n\n

So, training those types of generative AI models that try to think on their own and be predictive, you\u2019re not going to see that for quite some time. I don\u2019t think people are going to be willing to put their own money at stake as a test. The reward\u2019s not there.<\/p>\n\n\n\n

Q: Is there a way to avoid AI\u00a0algorithm bias<\/a>\u00a0in financial decision-making?<\/em><\/p>\n\n\n\n

A: You could try, but it\u2019s inevitable. AI is going to start coming up with its own opinions based on the data sets<\/a> it is provided. Humans have bias \u2014 whether you say you\u2019re unbiased or not, there\u2019s no such thing.<\/p>\n\n\n\n

Our perceptions are reality, so the rules that you\u2019re trying to apply to AI are unfair.<\/p>\n\n\n\n

If you look at what humans do, how do you expect something to be perfect? And what is the definition of perfect? Because my definition of bias is different from your definition.<\/p>\n\n\n\n

It\u2019s not a fair statement to say that a generative AI can be unbiased because it\u2019s not that black and white.<\/p>\n\n\n\n

On AI and Financial Fraud<\/h2>\n\n\n\n

Q: How can AI be used to detect fraud and illegal activity?<\/em><\/p>\n\n\n\n

A: A lot of AI is being used today in, for example, transaction processing. From both the card issuing standpoint and the payment space, they\u2019re doing a great job with utilizing AI technology to prevent and protect from fraud before the transaction even runs \u2014 technology such as 3D Secure 2 has been out for a little while.<\/p>\n\n\n\n

There are over 200 data points that are aggregated from the consumer\u2019s device when they\u2019re making a transaction, which is sent to the issuer to see if the issuer knows the device. We\u2019re in a data-driven world now, and there\u2019s so much being aggregated \u2014 it\u2019s quite astounding.<\/p>\n\n\n\n

Q: Is there a threat that the use of AI apps and tools could result in more fraud?<\/em><\/p>\n\n\n\n

A: From a bad actor standpoint, they are always trying. That\u2019s the game \u2014 it\u2019s the good guys vs the bad guys.<\/p>\n\n\n\n

In generative AI you have ChatGPT<\/a>, and then bad actors come up with some creative names like ChaosGPT and FraudGPT; it\u2019s the evildoers trying to wreak havoc \u2014 and it will be this continuous fight.<\/p>\n\n\n\n

It\u2019s been like that since the beginning of technology, people looking at ways to \u2014 not even really hack \u2014 but bend the rules a little bit. That\u2019s probably where the biggest threat is: the guys that ride the line between what you\u2019re allowed to do and what you\u2019re not allowed to do.<\/p>\n\n\n\n

They\u2019re just a little bit over the line of what you\u2019re not allowed to do, and so they have an advantage over the guys that are trying to do the right thing.<\/p>\n\n\n\n

Q: Is the financial services industry prepared to deal with the possibilities of AI?<\/em><\/p>\n\n\n\n

A: I think so. It\u2019s not new; it\u2019s just different. Somebody pulls a new weapon out, so it\u2019s: how you defend against the weapon \u2014 do you need a new shield?<\/p>\n\n\n\n

The attack vectors haven\u2019t changed. In an API-driven world, the bad actors, even with AI, are still trying to manipulate the same APIs. They just have a different tool in the tool belt to try to attack better, faster, easier.<\/p>\n\n\n\n

It\u2019s about keeping up on defense side to say: do we have everything locked down \u2014 is there a window open somewhere that shouldn\u2019t be? Is there one that an AI bot may be able to find that traditional hackers didn\u2019t find or didn\u2019t see before?<\/p>\n\n\n\n

The big threat is attackers having the ability to automate with AI and be dynamic in their attacks, and it doesn\u2019t take a person to code it. They can go and update their attacks because that\u2019s what you told the AI to do, and it\u2019s going to execute the plan.<\/p>\n\n\n\n

AI always thinks it is right, so if you give it an instruction and you ask: \u2018is this right?\u2019, of course, it\u2019s going to say yes because it just gave you the answer \u2014 even if it\u2019s completely wrong and it\u2019s delusional.<\/p>\n\n\n\n

Obviously, that\u2019s the risk of over-reliance on it, it makes up things to tell you that sound very right. It\u2019s interesting that the term they\u2019ve coined for it is \u201challucination<\/a>\u201c.<\/p>\n\n\n\n

Why Humans are the Front Line in Cyber Security<\/h2>\n\n\n\n

Q: Is there a need for organizations to take a different approach to cybersecurity<\/a>?<\/em><\/p>\n\n\n\n

A: It\u2019s about education. At the end of the day, if you\u2019re talking about security, the biggest weakness is us as people.<\/p>\n\n\n\n

So, it\u2019s just keeping people informed of what to look out for and what scams are out there, and then the responsibility comes down to the device manufacturers.<\/p>\n\n\n\n

If they can provide a device that can\u2019t be easily penetrated, then the rest of the responsibility falls on consumers from a business or personal standpoint, to just make sure that you\u2019re educated to not click the link you don\u2019t know.<\/p>\n\n\n\n

Your CEO is not going to ask you for gift cards through text messages \u2014 it sounds funny, but I hear these stories all the time, and it still comes down to the human factor \u2014 that\u2019s where most breaches happen.<\/p>\n\n\n\n

If you look at most of the breaches that we\u2019re talking about within the last few years, they all started with a person. The latest one with\u00a0MGM being shut down for so long<\/a>, it came down to somebody spoofing somebody on a phone call to get access. They didn\u2019t break in; they didn\u2019t blaze their way through the front door, they picked the lock.<\/p>\n\n\n\n

It comes down to consumer awareness, and it\u2019s tough to discern what\u2019s true out there today. The social media platforms are doing a better job, but it\u2019s a fight that will never end.<\/p>\n\n\n\n

The Regulatory Landscape<\/h2>\n\n\n\n

Q: What is your view of the regulatory environment, in light of the White House recently issuing an Executive Order on managing the risks of AI?<\/em><\/p>\n\n\n\n

A: It\u2019s about time, I think we\u2019re behind. The reality of it is the rest of the world, specifically the EU<\/a>, is a lot further ahead than we are from a regulation perspective, so it\u2019ll be interesting to see how the US starts to address those things.<\/p>\n\n\n\n

It\u2019s really hard to regulate something like AI. Hopefully, the government can come up with a framework that is fluid \u2014 but if history tends to repeat itself, that\u2019s not going to be the case. Just with everything else in technology, it always seems to lag behind.<\/p>\n\n\n\n

The balance is really tough to strike. If you look at past regulations \u2014 I\u2019ll use cryptocurrency as an example \u2014 the government was slow to regulate, and then they\u2019re finally coming up to speed with the CBDC side of things<\/a>.<\/p>\n\n\n\n

The government needs to put a framework in place that allows somebody to be flexible. And if you put the guardrails up around the tenets of what\u2019s going to happen in AI, what you can and can\u2019t do, it\u2019s really around following principles.<\/p>\n\n\n\n

So if you can get the right principles in place foundationally then I think it will be OK.<\/p>\n\n\n\n

The startups that would have concerns are probably the ones that you want to have concerns.<\/p>\n\n\n\n

I do believe there\u2019s a place for regulation in things like AI because there\u2019s a lot of real impact that can happen with something thinking on its own; it\u2019s quite scary.<\/p>\n\n\n\n

The AI Trends in 2024<\/h2>\n\n\n\n

Q: What are the main AI trends going into 2024?<\/em><\/p>\n\n\n\n

A: It\u2019s going to be around what we are allowed to put generative AI on. Are you allowed to put generative AI on \u2014 I\u2019ll call it a machine \u2014 something that\u2019s not just where I can talk to it on my computer, but where it can actually take an action.<\/p>\n\n\n\n

That\u2019s really where the biggest regulation is probably needed from a government oversight standpoint because then it becomes real.<\/p>\n\n\n\n

To take the iRobot example, you put generative AI inside some type of bot that now is beyond its programming of just walking around or doing a specific function \u2014 it can do something or make a decision on its own, and when you ask it why it did that, it says just like a human \u2018I don\u2019t know I just did it, I don\u2019t know why\u2019.<\/p>\n\n\n\n

That\u2019s really when it becomes real, and I think we\u2019re going to start to see some of that next year.<\/p>\n\n\n\n

Unfortunately, I think what will happen is somebody\u2019s going to get hurt, and there\u2019s going to be a huge public outcry over it \u2014 rightfully so \u2014 and that\u2019s when it\u2019s going to become really real for people.<\/p>\n\n\n\n

All these startups, their response will be: \u2018Oops, it wasn\u2019t supposed to do that\u2019. Well\u2026 it wasn\u2019t supposed to, but it did it anyway, so what checks did we have in place? And how do you prevent it from overriding the checks you put in place?<\/p>\n\n\n\n

Because early on with ChatGPT you could prompt and manipulate it to get answers that probably shouldn\u2019t have been provided in the first place.<\/p>\n\n\n\n

Again, the people are sort of riding the line of what you\u2019re supposed to do with it \u2014 and they\u2019re just trying to keep prodding.<\/p>\n\n\n\n

People think that AI is going to revolutionize different sectors, and I think they\u2019re right in some regards. But it probably will not be as broad as they think. When they think about people in the service industry and assume AI is going to take over all these jobs, I actually don\u2019t think that\u2019s going to be the case.<\/p>\n\n\n\n

I\u2019ll use an analogy of when you had a lot of people cutting grass by hand, and then somebody came up with a lawnmower. It just revolutionized it, and what ended up happening is it actually created the ability for more jobs because it\u2019s very easy to go clear a field to do something different on it; now I can go play a sport easily.<\/p>\n\n\n\n

So now we need people to go run the sport, now I can put a stadium here. What people fail to realize is that while it\u2019s going to take over all of these jobs, it\u2019s the jobs people probably don\u2019t want anyway, which is why we\u2019re working towards replacing them \u2014 and then it\u2019s going to open up different opportunities, it\u2019ll be a paradigm shift for where people are needed.<\/p>\n\n\n\n

When you say AI is going to replace jobs, if we can\u2019t find people for those jobs now, are they really taking over all of these jobs that we have vacancies for anyway? My perspective is it\u2019s going to level people up more so than take over their jobs.<\/p>\n\n\n\n

About Kevin Shamoun<\/h2>\n\n\n\n

Kevin Shamoun serves as a Senior Vice President (SVP) for FortisPay (Fortis Payment Systems).<\/p>\n\n\n\n

Formerly he was the founder of Zeamster, which Fortis acquired.<\/p>\n\n\n\n

Kevin has extensive operational and technical knowledge of the payment industry, including almost 20 years of experience working with major Independent Service Organizations (ISOs) and major Financial Institutions.<\/p>\n\n\n\n

He has managed all aspects of the payment industry. encompassing both acquiring and issuing.<\/p>\n\n\n\n

He has been responsible for designing, deploying, maintaining, and securing critical systems that supported multiple organizations.<\/p>\n\n\n\n

He is currently the Vice-Chair of the Electronic Transaction Association (ETA) Technology Committee and holds a Bachelor of Science from Oakland University and a Master of Science in Business Information Technology from Walsh College.<\/p>\n\n\n\n

By Techopedia | https:\/\/www.techopedia.com\/experts-on-ai-in-finance-kevin-shamoun-svp-at-fortis <\/p>\n","protected":false},"featured_media":13299,"template":"","class_list":["post-13298","in_the_media","type-in_the_media","status-publish","has-post-thumbnail","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/fortispay.com\/wp-json\/wp\/v2\/in_the_media\/13298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fortispay.com\/wp-json\/wp\/v2\/in_the_media"}],"about":[{"href":"https:\/\/fortispay.com\/wp-json\/wp\/v2\/types\/in_the_media"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fortispay.com\/wp-json\/wp\/v2\/media\/13299"}],"wp:attachment":[{"href":"https:\/\/fortispay.com\/wp-json\/wp\/v2\/media?parent=13298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}