Are Amex shutdowns set to increase in 2020?

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It’s no surprise that a lot of miles and points enthusiasts have been a bit anxious off late. Last year, we saw a couple of waves of Amex account shutdowns. At a very basic level, Amex has been clawing back points across the board. In certain cases, they’ve also completely shut down customer accounts. I see these shutdowns getting a lot more sophisticated and targeted in the future. Whether we’ll see a spike in overall volume, we’re not quite sure, but Amex is making moves in a certain direction.

Amex Shutdowns

Last year, Amex started making some initial moves which got a lot of miles and points enthusiasts worried. It first started with clawbacks, then complete shutdowns. Even though there has been a slight lull after that, I expect we’ll start seeing a few shutdowns in 2020 as well.

Leveraging Technology

Banks are no longer just lenders. They’ve now evolved into sophisticated technology companies. Given the plethora of devices and apps around us, Amex prides itself on being at the forefront of technology, especially AI and ML. When it comes to hiring practices, Amex also requires its employees to have some level of data analytics capabilities.

Artificial Intelligence and Machine Learning

This report in Money Control sheds some interesting nuggets on some of the moves Amex is making as it leverages AI and ML. In essence, their goals are two fold. Firstly, Amex wants to leverage AI and ML to provide customers with the best marketing messages. What it means is the ability to provide curated personalized experiences and tailor offers and deals to customers based on their behavior patterns and spending habits. We’ve already seen glimpses of these with targeted credit card offers and Amex offers over the years.

Secondly, they’re looking to leverage AI and ML and an effective tool to combat fraud. Jayatu Sen Chaudhury, who is the VP of Global Commercial & Merchant Data Services at Amex, explains in this interview to Money Control:

AI and ML are being leveraged across the company by different business units to deliver on the exceptional brand experience we are known for, at scale, in the digital age. Some examples include Credit & Fraud Risk, where we use advanced AI-powered algorithms to detect fraudulent payment transactions at the point of sale and to determine the credit limits of new customers.

Jayatu Sen Chaudhury also goes to to wax eloquent about how this data and analytics based approach has the full support of Amex’s senior leadership and how they pride themselves on being a data driven organization.

Mezi and Resy

More evidence of Amex’s heavy tech and data focus can be seen with their latest acquisitions. Audrey Hendley, the President of Amex Travel, recently spoke at CES about the future of Amex Travel and how Amex is integrating AI into the experience.

Hendley also talks in depth about Amex’s acquisition strategy and why they acquired LoungeBuddy.

We have a ventures team at Amex who are based in Palo Alto. They help us identify companies that could be good partners. I talk to them to identify the tech we need, as we try to solve customer pain points. For example, in April 2019 we acquired LoungeBuddy to solve a need based directly on customer feedback.

In addition to LoungeBuddy, Amex also has Mezi and Resy. Mezi is a virtual travel assistant, whereas Resy helps you make restaurant reservations.

The Pundit’s Mantra

While Amex executives don’t spell it out in the same words, there’s nothing that’s stopping them from going a step further. As Amex ramps up their technological prowess, they’ll become even more likely to crack down not just on actual fraud, but also ‘fraud like’ behavior. With AI and ML in their arsenal, they’ll become even more adept at catching unusual customer behavior patterns.

What could these patterns be? We’ve already seen a few cases where Amex has closed the doors on workarounds. Most gift cards no longer trigger the airline fee credit. A popup shows up when you’re not eligible for a welcome bonus for a card. Also, Amex offers are now limited for single use, unless specified otherwise.

For some more context, you can have a look at this Amex shutdown thread which was quite active till the end of November 2019. Also, you can read the most recent data points about the clawing back of Airline Fee Credits here.

Amex is clearly running a well oiled tech and data machine with clear two-fold objectives. Provide customers with the best experience and offers, and on the other hand, cut costs by weeding out fraud with the help of some of the best tools in the industry.

What do you think about Amex’s approach? Have you been affected by any of Amex’s crackdowns? Let us know in the comments section.

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