Who protects consumers in payments technology?

Making sure payments products are developed with consumer fairness and safeguards is critical for regulatory compliance, and a growing body of tools is making it easier to design and build these protections directly into products. Intelligent platforms can combine human insights with technology to collect and analyze data about consumers' product experiences. How are developers using these tools and data to create safe new payment products? Marcia Tal, CEO of Tal Solutions and founder of the PositivityTech platform, discusses the details with American Banker senior editor Kate Fitzgerald at Payments Forum in San Diego. 

Transcription:
Fitzgerald (00:11):

Hello, this is Kate Fitzgerald. I'm a senior editor at American Banker. We are live today in San Diego at the payments forum, and we are here with Marsha Tal, CEO of Tal Solutions. And Marsha, why don't you tell us about your platform and what you do.



Tal (00:28):

Thank you. Thank you for inviting me. I've developed a platform called PositivityTech, and this platform was built really to be able to represent the power that is behind the customer narrative. So what I really mean is that when customers talk to us, we can ingest what it is that they say. We can use those narratives to be predictive of what's going to happen in the future, and we can build models that are truly based on what the customer is telling us to help drive our strategy.



Fitzgerald (01:07):

And this is primarily around financial services and customer satisfaction.



Speaker 2 (01:13):

It is right now within financial services, although we have tested within health care insurance, and I think it is really across any industry that deals with customers or any institution that has employees, because by the same way that customers tell us how they feel, employees also tell us how they feel. So the power is really in bringing in the raw conversation as opposed to what somebody has said about that conversation.



Fitzgerald (01:45):

And it originated out of customer complaints and customers trying, financial institutions trying to deal with customer problems and complaints that often result in things that are escalated even to the complaints to regulators.



Tal (01:59):

It did. My focus continues to be what I call high- risk interactions. And the reason that I'm focused on that is because as bankers we spend a lot of time trying to understand all kinds of risk. And one thing that we don't necessarily do is systematically look at what it is that the customer is telling us for signs or leading indicators of risk, of things that are going to happen in the future. So I began with the highest-risk interactions I could think of, which were actually complaints to regulators.



Fitzgerald (02:36):

And over the last five years, regulators have increased their scrutiny on many products. We've seen it started with cards, I guess, and it's escalated up as digital transactions have evolved. Right. So I sense that the net the CFPB casts now is wider. Would that be true?



Tal (03:02):

It is wider, but I think it's also comprehensive, meaning that it's not unique to one product or another. I was impressed by one report that the CFPB put out that actually looked at complaints from the standpoint of a life cycle of a customer. So it could be that it could be a card product or a money transfer, but if it's at the origination point versus collections, then they might look at that differently.



Fitzgerald (03:31):

So one of the most interesting areas right now is product design and planning. So you're telling, we've been discussing the CFPB has increased its scrutiny, technology is rapidly evolving and it's instead of chasing the problems after they occur, is there any way to build products with consumer protection in mind?



Tal (03:56):

Yes, absolutely. I think that is really the golden nugget of all of this, which basically is suggesting that if you get really good at understanding those friction points, you track them back to their origination point, then you would be able in your design phase to be able to design for that, not to happen in the first place, but it requires you to really understand the journey, to understand what causes the friction, and to even look at it in a way that is turning it on its head and saying, our tagline is the science of transforming negatives to positives. So from every negative can come a positive and that would end up in a better product design.



Fitzgerald (04:43):

I've picked up from talking to a lot of people at this payments forum conference that banks struggle to figure out how to devise a system for taking in, analyzing and responding to the complaints that are coming in through all these different channels, customer service, chat, emails, perhaps even in the branch if they have one. And that there might even be, I mean at this point, is there a standardized approach for institutions to handle complaints and respond to them?



Tal (05:12):

I don't think that there is a standardized approach, but I do think that the demand from the regulators is that it becomes more standardized because complaint management, as an example, is part of safety and soundness. So once you're audited in this regard, the expectation is that you would have a certain level of standards in the way in which you approach these complaints and the accuracy of which you're categorizing them.



Fitzgerald (05:42):

So you can show them that you have a trail of having received it, analyzed it, responded to it.



Tal (05:48):

Absolutely. And I think we all know, especially those of us that have been part of audits, that the more proactive you are and the more that you raise the issue ahead of time, the better it is for everybody.



Fitzgerald (06:01):

So what was that you were alluding to, in that consumers will tell you the future? What did you mean by that?



Tal (06:09):

I'll give you an example. Let's talk about when people can't make their payments. Most customers that call us that are talking about that tell us before they stop making the payment that they're struggling. There are examples sometimes, I remember reading a complaint where someone said, I need to determine what I'm going to pay first, my medicine or my rent. Where does the credit card fall in that? It doesn't fall into where the rent and the medicine are. So we know that there's a problem. And if we connected that from that first discussion all the way through that when you get into collections, why would you be surprised that they're not paying you? You probably could have known that and addressed your collections strategy differently.



Fitzgerald (06:55):

Now, we're hearing now that ChatGPT and other AI tools are going to take away a lot of our problems. It sounds like if they know where we're going to go next and buy next, they're going to know, anticipate our next financial, the financial crunch of each individual before it happens. Is that unrealistic?



Tal (07:17):

I myself am not yet fully bought into what that's going to be. I understand that the capabilities are there. However, I also think there's something to domain expertise, right? And in building out all of these kinds of intelligent products, you have to have a level of business knowledge and domain expertise. And that takes a long time to build into these models. So I am optimistic that there's still a role for all of us with domain expertise alongside the technology.



Fitzgerald (07:54):

Plus, haven't seen any of this stuff fully built out yet. But also there's the wild card, which is consumer action. Can anyone predict that?



Tal (08:04):

Well, that is really also another opportunity in terms of it's whether you can predict what the consumer will do comes from how early you're tracking their behaviors, their attitudes, and what it is they're telling you. So we know that in financial services for example, there's quite a lot of sophistication of data integration, whether we call it demographic, psychographics, attitudinal data, behavioral data. There's no end to the kinds of data. Now I'm saying: Add into that the customer conversation and now you can really have it even more circular to where we begin with a conversation and end up with that behavior. And if we see enough of that, we should be able to understand what types of actions will take place.



Fitzgerald (08:54):

I feel like we're still at the beginning of where this might go. Would you agree?



Tal (08:59):

Absolutely. Without disclosing how many years ago. But I remember when we first began this kind of exercise with credit bureaus, right? At the time, credit bureaus were really just a somewhat narrow risk management tool that over the years, over the decades has become, right, a source of information and expanded and expanded. I think it's similar to this kind of opportunity.



Fitzgerald (09:24):

Very good. Thanks so much.



Tal (09:26):

Thank you, Kate.