The Case for Always-On, Always-Connected Dispute Management
Payment card disputes and inquiries are as nuanced and various as the individual cardholders who initiate them. Card issuing banks need data, skills and advanced technologies to respond to each unique situation quickly and at scale. A recent study by Arizent found global banks are exploring AI’s potential to improve efficiencies, resolve issues and deflect fraud by automating dispute management and other manual processes.
“Unleashing the Power of AI,” authored by Matt Kuhrt and sponsored by 12C Inc., found increased interest in AI among global banks with more than $100 billion in assets. While AI has been around for decades, it is more accessible to consumers than ever before, Kuhrt noted.
“As the benefits of a new generation of AI tools spread, consumers will expect AI-enhanced experiences across the board,” Kuhrt wrote. “And banks won’t be immune to that expectation. As organisations across industries pursue AI applications, standards and best practices will evolve quickly, and talent capable of integrating AI innovations will likely be in short supply.”
Amiko Virtual Agent
Amid early-stage AI pilots and implementations, the European banking community is seeing a notable proof of concept in Rivero’s Amiko Virtual Agent, a solution designed to automate dispute management while making the process simple, easy and friendly for all stakeholders.
Thomas Mueller, Co-Founder and CEO of Rivero, pointed out that the Amiko Virtual Agent can handle a dispute from start to finish, from analysing transactions and requesting information when needed to preparing documents and submitting claims for customers and even following up when necessary.
“The Amiko Virtual Agent is created by humans for humans,” he said. “And most importantly, it delivers a consistent experience in a repeatable, explainable way.”
Unlike generative AI and other large language models (LLMs), which are dynamic, unpredictable and even error-prone, the Amiko chatbot is a stable, rules-based solution that banks can fully control, he stated, crediting its proven success and growing following to these five design principles:
1. Drive Customer Engagement
In a world of customer-centric commerce, consumers are accustomed to self-service options when shopping in stores, online and in mobile apps. Transactions have evolved from single-click checkouts into fluid conversations between customers and brands. Text messages, email offers and unattended kiosks have enabled retailers and service providers to expand their reach and meet customers wherever they shop. Card-issuing banks can use this playbook to answer disputes and inquiries in real time and meet customers at their most urgent time of need.
Banks that have launched the Amiko Virtual Agent have migrated customers to the self-service channel while keeping traditional inbound channels in place, achieving a 75% adoption rate in as little as 2 months. This purely organic transition has enabled participants to gradually phase out legacy phone, paper and email systems.
2. Bridge Communication Gaps
Due to the time-sensitive nature of cardholder disputes, card issuers must respond quickly to incoming requests and facilitate meaningful communications between customers and merchants. The Virtual Agent provides pre-checked, pre-filled fields that simplify pre-dispute procedures, with parameters that indicate if customers meet qualifying criteria and full documentation that reduces errors and lightens back-office agent workloads.
Participating banks have found customers who choose the self-service option are very likely to be completely served by the Virtual Agent without the need to call or email their bank. In addition to removing friction and improving communications among all parties, these conversations have resolved or deflected 20% of dispute claims, according to recent reports.
3. Deflect Fraudulent Disputes
By connecting customers and merchants to resolve issues and using advanced analytics to identify anomalous behaviour and deflect fraud, the Virtual Agent de-escalates disputes and closes loopholes that exist in proprietary systems. These capabilities are essential for detecting the many different scenarios and motivations behind customer disputes.
Consider an online dispute application on a bank’s website. Consumers could put any values in the fields of that online form and game the system, knowing that if a merchant doesn’t respond within the appropriate window of time, they might win a chargeback. This type of scenario would not happen with Amiko. The Virtual Agent would not accept gibberish on an online form and brings a level of intelligence and engagement to a previously flat experience.
4. Resolve Pre-dispute Issues
When customers do not recognise transactions, card issuers and merchants will typically ask if they have checked with members of their family. More and more customers are affected by what is sometimes called family fraud, especially in households where children may use a family member’s payment card data for in-app, online, and in-store purchases.
The Virtual Agent can help cardholders navigate these situations and understand that the transactions were, in fact, legitimate by presenting relevant data, such as an authenticated e-commerce transaction or a Chip+PIN in-store transaction. These conversations, backed by transactional data, have successfully solved and deflected 80% of fraudulent disputes, whether opportunistic or unintentional.
5. Recover Revenue
Issuers that have experienced the Amiko Virtual Agent can attest to the power of zero-touch revenue recovery, which has resulted in a 35% reduction of scheme disputes, in which funds flow back to card accounts without any human intervention.
Mueller mentioned that some financial institutions have taken a phased-in approach to implementation, initially by placing Amiko in the back office and then gradually integrating the self-service agent into their mobile banking apps. Even as it coexists with legacy dispute management systems, the Virtual Agent wins over clients and customers, he said, in a natural, organic way. Eventually, when just a handful of disputes are coming through the old paper, PDF or online form, banks may shut down the old systems and begin directing customers to mobile apps.
“In the end, it's still machine intelligence with the machine doing exactly what the human told it to do, which makes it predictable,” he said. “You can’t place a rules-based engine in a self-driving car because the world is way too complex, but if you operate on very clear rules set by Mastercard and Visa, you can build a fully automated dispute management solution without the risks and shortcomings that would come from using an LLM-based approach.”
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