Phishing, which we all know is a fraudulent attempt for hooking sensitive user data such as code, usernames, and passwords, can do fatal financial damage. Those days are behind us when impersonators used to send spammy emails about the fake internet packages just to make you click and install malware on your device. Although such scams still exist phishing attacks are bigger. They have sunk not just individuals but giant companies, too.
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In the digital age, fraud is endemic. Did you know the United Kingdom loses £ 190 billion per year to fraud? This is more than what the country’s government spends on health and defense. Regardless of the size of the business, organizations are mostly failing to keep pace with the threats. Who’s responsible for all this? A huge chunk of the blame goes to poor human cyber hygiene. Fortunately, business leaders have started to take resort in Artificial Intelligence for fighting fraud.
McAfee’s cybercrime report says that cybercrime is currently costing the global economy $600 billion. One of the most common forms of cybercrimes is credit card fraud and as online transactions are increasing, so is the ratio of this type of fraud.
It is hard for a human being to sift through a large volume of customer data and transactional data. But with AI, we can minimize this problem. In fact, AI can help identify the behavior patterns which are irregular for certain customers.
The Use of AI in Identify Verification
The use of AI is not limited to that. It is now being used for detecting fraudulent activities with identity verification measures for authenticating customer ID. An AI software called Shufti Pro is an identity verification software used for providing KYC (Know Your Customer) services via AI-based SaaS. It helps the banking sector in guarding against online fraud and cybercrime.
The software uses an AI-based authentication system for verifying user ID within minutes. This system has universal language support. Its API enables the financial sector to integrate web-based apps and modules with zero downtime. AI has the potential to transform the future of financial fraud detection for sure.
The Future of Fraud Detection
A new generation of algorithms is in process based on the way people think. It is known as the convolutional neural network. It is based on the visual cortex; a small segment of cell sensitive to certain regions of the visual field in the human body. The neural network of this program uses images and it functions in the same as the visual cortex. It is capable of extracting the visual features like endpoints, oriented edges or corners. In order to cater this everyone must have at least basic information about types of cyber attacks and how can we prevent ourselves.
This technology studies data of an individual and determines whether the transaction performed on the credit card is by the cardholder himself or someone else is using their card. The software is able to detect potential lies. When such solutions are implemented, they can curb cybercrime and reduce economic losses big time.
Fraud is happening around the world ever since the human race existed. As technology is advancing, so are these frauds. They are becoming complex and very hard to stop. We can leverage technology for identifying fraudulent activities before they cause serious harm.
Once fraud is reduced and controlled, it will reduce the cost a business has to bear in terms of financial losses. They will also be able to maintain a reputation with customers. Chances are if financial institutions are able to reduce fraud and save costs, they may lower the transaction fees and interest rates for their customers. AI has the potential of not just reducing cybercrime but making clients happier as well. It will be a win-win situation for all.
Before we even know it, there will come a time where fully automated AI-based security systems will be in place. This will eliminate the percentage of fraud without the need for human input.
Final Words
In the long run, AI will become an integral part of the way organizations prevent fraud. In the meantime, we need to change our fraud management techniques and face the criminals with stronger adaptive technologies. Over time, as AI and machine learning becomes an integral part of our systems, the criminals will reach a breaking point where their return on investment is not lucrative enough. The ratio of cybercrimes and frauds will then fall drastically. As many of us have patiently waited to get Cox cable connection after Googling “Cox near me” every other day, we can certainly wait for the boom of such AI-based systems.
