Consumer trends and needs directly affect payments innovation through the application of AI in finance, real-time payments enhancements and global transaction capabilities.

“There’s this concept that I see of consumer trends directly driving into how we innovate across payments as a whole,” Alexandra Johnson, head of innovation at Bank of America, said Tuesday at Fintech Connect North America in New York.

For example, AI started as a client-facing technology, Johnson said, noting that today, the finance world is looking at how AI can be used for better forecasting, cash management, internal decision-making and data source management.

Johnson shared three consumer trends driving innovation as payments technology evolves:

1. Consumerization of transactions: This is the primary driver of payment innovation, Johnson said.

“Real-time payments started as two people [who] wanted to make payments to each other. Now, we’re talking in a business context. How do we make sure we can make our own transactions, account payables, account receivables, all in real time?” she said.

2. Speed of payments: Real-time payments already exist, now the key is to speed up the transaction process, Johnson said. “You have to think about all of the reporting, the reconciliation, the creation of the transaction.”

“We can do real-time payments all day long … but it doesn’t make the transaction end-to-end real-time,” she said. Speeding up those payments is an area for innovation.

3. Digitization: The last piece driving innovation is the digital journey, Johnson said. There is opportunity for innovation as financial institutions continue to move from paper to digital.

“Getting into APIs, automating, that’s going to be a trend … for the foreseeable future, also driving some of the innovation.”