According to the Financial Fraud Research Center at Stanford University, Americans lose $50 billion per year to international scam artists. Companies are not immune to this risk. While new technology makes it easier to steal funds, data, and sensitive information, advanced anti-fraud technology detects and predicts fraudulent behavior with greater efficiency than the human mind could ever hope to do.
With technology evolving so quickly, the best way to fight fraud may be with even more state-of-the art technology. Modern applications of Artificial Intelligence (AI) and machine learning were developed 25 years ago but have only recently entered mainstream consciousness. The business world might like to think of it as a sophisticated system that goes beyond the firewall. In short, AI sifts through mountains of data, connects pieces of evidence left behind by fraudsters, and generates a straightforward report indicating potential fraud threats. Best of all, AI models learn in real-time and improve their predictions with practice.
Advantages of Artificial Intelligence
Artificial Intelligence could become the most powerful tool in your fraud prevention arsenal, and the technology is growing rapidly. Machines are set to perform more than half of the data and analytics services by 2022.
Practically speaking, fraud prevention professionals analyze invoices and check for inconsistencies and then raise red flags. However, the reach of AI is much further. It analyzes traditional data along with social media posts, recorded video, and audio data. It takes customer and transactional data to create a picture of predictable behavior, and as soon as that pattern is disrupted, businesses are alerted. Often, it catches suspicious actions and prevents fraud from occurring, building trust with customers and preventing headaches for business owners. This technology outshines human capabilities in three key areas:
Preventing fraud usually means moving at the pace of online transactions. You only have seconds to intercept and shut down costly illegal activity. Humans simply cannot keep up with changing fraud patterns with the efficiency of an AI system. Machine learning magnifies the effect by being able to make real-time decisions.
When a company decides to aggressively fight fraud with only human means, legitimate transactions may be inadvertently declined. This sort of false positive results in lost business and brand damage. AI can be helpful in these cases because its algorithms analyze many more data points than possible for humans or simple software systems. This increased precision leads to fewer approval errors and more trust in your company.
3. Lack of Bias
Technological experts agree that AI systems can only be as good as their makers, so some bias can exist in self-learning machines. After all, they experience, learn, and change their approach like humans. However, AI differs because it begins by evaluating all data with the same level of scrutiny. Then it applies algorithms accordingly. Its goal is to defend a business against fraud when human eyes may overlook it.
The future of fraud protection is here, and it’s expanding its scope every day. This new technology encourages business owners to stay ahead of fraud threats and streamline existing processes. It may be worth considering as you begin planning for the new year. Our professionals can help your business navigate these technological advances and mitigate fraud risks. Contact us with questions.