How Kumar Shanmugasamy Is Transforming the Payments Industry with AI

Real-time payment solutions offer a certain convenience and peace of mind over traditional payment systems that take days to weeks to process. However, they also come with various inherent risks, as there’s less time to verify each transaction.

So how can payment processors balance speed and security? Kumar Shanmugasamy, senior vice president at a major banking organization, believes that artificial intelligence and machine learning hold the answer.

Identifying the Need to Modernize Payment Technology

After graduating with a bachelor’s in computer science and engineering from the University of Madras in India, Kumar Shanmugasamy began working in the financial sector, specializing in payment processing.

In his early career, he became intimately familiar with traditional payment systems and the frustrations of an increasingly modern user base that was no longer satisfied with waiting multiple days for payments to actually arrive.

However, these problems could not be solved overnight. After all, the same processes that slow payments to a crawl are crucial for security. For example, in traditional systems, a payment needs to be encrypted and securely sent to a payment processor, which then forwards it through a bank network for authorization. This authorization process evaluates the transaction for fraud and checks account balances to confirm available funds, only allowing the transaction to proceed if approved.

Furthermore, legacy systems often use a batch process — grouping multiple transactions together to process them at scheduled times. This means that it may take 1–3 business days before a batch is finally scheduled and funds arrive in the receiver’s account.

Finally, traditional payment systems tend to rely on static, fixed rules, such as flagging any transaction above a certain amount or any purchase in an unfamiliar country as potential fraud. It’s a brute-force method that unfortunately flags a lot of false positives and does not catch more sophisticated types of fraud. By running each transaction through a static checklist, payment processors can miss nuanced patterns that might signal fraud, like subtle shifts in a customer’s spending habits or repeated small transfers. It also means yet another hitch in the process that further slows down payments.

Shanmugasamy knew that this process was integral to keeping payments secure, but he sought a way to modernize it, targeting both speed and security and allowing for major improvements in convenience and financial safety.

Solutions for Real-Time and Instant Bill Payments

Over the last 19 years, Shanmugasamy has dedicated his career to modernized solutions that allow for faster and more secure financial transactions. His work has garnered significant industry attention and has made a major impact for users in two major areas: real-time payments and instant bill payments.

Real-Time Payments

Shanmugasamy first took aim at the traditionally slow workflow of payment processing by targeting two of its biggest issues: the need for batch processing and an overreliance on static rules to flag potential fraud.

To this end, Shanmugasamy built a real-time payment solution that replaces batch processing with instant payments. And instead of relying on rigid fraud rules, it uses machine learning to intelligently detect unusual patterns and flag suspicious activity.

For example, instead of simply flagging a major transaction, Shanmugasamy’s system compares it to recent behavior, timing, and even patterns in similar accounts. By learning from each transaction, the system can more accurately differentiate between fraud and genuine transactions, allowing legitimate payments to go through quickly.

Shanmugasamy’s solution also leverages AI to learn each user’s habits and anticipate their needs. For example, if a user frequently pays certain bills or makes repeated transfers, the system remembers these preferences and offers prompts or recommendations that make each transaction faster and more personalized.

Finally, it also helps businesses better handle large transaction volumes. During high-traffic times like busy shopping days, it might allocate more server capacity to handle payment requests or prioritize critical transactions to prevent delays.

Bill Payments

The other key area where Shanmugasamy’s work has made a significant impact is in bill payments. He realized that many organizations, such as utility and insurance providers, still rely on old-school payments like mail-in checks — methods that are particularly vulnerable to fraud, theft, and lost payments.

Shanmugasamy’s instant bill payment solution eliminates these risks and drastically speeds up the process by allowing businesses to send convenient, digital payment requests. Customers get a notification on their phone, and they can pay instantly with a few taps.

In addition to providing streamlined convenience for organizations and customers, Shanmugasamy’s system was also built in compliance with global payment processing regulations.

“One of the biggest challenges in the payments industry is keeping up with constantly changing regulations and standards," Shanmugasamy explains. “Payment systems need to speak the same language as others worldwide — what’s called interoperability.”

To this end, Shanmugasamy’s solution uses ISO 20022, a universal standard that lets payment systems worldwide work together, moving payments and data safely across borders.

Balancing Speed and Security with Intelligent Payment Solutions

Shanmugasamy’s work is part of an overarching industry shift toward a more streamlined approach to commerce and digital business. In his article, The Future of Transactions: Exploring the Impact and Applications of Intelligent Payment Systems, published in the International Journal of Science and Research, Shanmugasamy explains how these solutions are transforming fields like health care, retail, and telecommunications. He envisions a future where AI-driven automation will free professionals from routine tasks, allowing them to focus on strategic decision-making.

“The future of AI in banking is bright,” he explains. “Soon, automation will take over routine tasks, allowing financial professionals to focus on more complex work, all while keeping customers and transactions secure.”

In recognition of his work, Shanmugasamy has earned awards such as a Fortune Leadership Awards’ Innovation Excellence Award, a Titan Innovation Award, a Global Tech Award for Excellence in Banking Technology, and a Globee Business Award as the Innovator of the Year in Finance. He’s also been selected to judge various industry awards, like the 2024 Claro Awards and the Global Recognition Awards.

Learn more about Shanmugasamy’s work by exploring his academic research.

BDG Media newsroom and editorial staff were not involved in the creation of this content.