Preventing fraud is one of the biggest concerns that modern businesses have to contend with today. Not only can fraud seriously affect a business’ revenue, it can also negatively affect the business’ reputation among its customers, especially if word of the fraudulent incident gets out. This can result in even more revenue loss.
Thankfully, there are a lot of anti-fraud measures that a business owner can choose from to protect their bread and butter with. However, one particular kind of protective measure against fraud has become quite popular as of late—specifically, fraud detection using artificial intelligence and real-time data analytics.
Using artificial intelligence and real-time data analytics in business is nothing new. Many business have in fact begun to use AI to automate and thus streamline their more tedious and repetitive work processes, increasing their employee productivity and efficiency as a result. In this particular instance, however, AI is being used not to help in administrative business functions but to actively search, detect, and predict suspicious behavior that could lead to the discovery of fraud. This particular approach has met some great success in many industries so far, especially in the e-commerce and banking industry.
In this particular article, we’ll be exploring the concrete benefits that business stand to gain when using AI and real-time analytics solutions for fraud detection.
Automated fraud detection solutions are more thorough and efficient than traditional solutions when it comes to detecting fraud.
While there’s nothing that can ever replace the human worker when it comes to tasks that require creativity, intuition, and critical judgement calls, there’s no denying that automated solutions like machines learning, artificial intelligence, and real-time data analtyics are perfect for jobs that are highly repetitive, tedious, and time-consuming. This is because fraud detection requires poring over huge amounts of data and analyzing them in real time, which is practically impossible if one were to rely on human labor and traditional computing methods alone. Not only can automated solutions perform these tasks more efficiently and thoroughly, but as they will never get tired or suffer burnout from these tasks, a business owner can rest assured that the work will be done on schedule.
By integrating artificial intelligence and real-time analytics in their fraud detection arsenal, a business can leverage this tireless efficiency in protecting itself against fraud and other potential crimes that could result from it, such as money laundering and insider trading. An AI-powered solution can and will provide continuous monitoring for suspicious customer and employee behavior, which could then lead to early detection and prevention of fraud.
Automated fraud detection solutions can become even more efficient the longer they’re put to use, thanks to machine learning
Along with its ability to provide tireless monitoring and protection against fraud, an AI-powered solution has another edge over traditional fraud detection measures. Specifically, its ability to learn how to get better at its job on its own, with minimal or even no supervision whatsoever. This is called machine learning.
Machine learning, in a nutshell, is an artificial intelligence solution’s capability to automatically learn new information from experience in doing its assigned task, rather than just rigidly adhering to the rules set in its programming. This allows the solution to recognize patterns and trends on its own as it’s working, allowing it to not only become even more efficient in its role but also discover unique insights and information that could prove beneficial to the business owner.
In the context of fraud detection, machine learning can not only help artificial intelligence solutions to quickly find and flag suspicious behavior as dictated by its programming, it can also find new behaviors and attack patterns that could arise from fraudsters trying to remain undiscovered. Obviously, this is indispensable when it comes to fraud protection, as this means that no matter what method fraudsters or cyber criminals, the AI solution is bound to pick it up and see it as the suspicious behavior that it is.
Besides this, machine learning also enables the AI solution to learn from historical data of past fraud incidents, which would help it identify existing patterns and trends much more reliably. So in using an automated fraud detection solution, a business can protect itself from both known and unknown fraud attack methods.
Automated fraud detection solutions allow businesses to refocus their resources.
When a business owner integrates AI fraud detection and real-time analytics solutions into their anti-fraud security platform, their need to devote extra manpower or resources to preventing fraud is lessened. While they will still need IT security personnel and will still be required to train their staff to recognize fraudulent behavior, the automated fraud detection solution’s round-the-clock monitoring and behavior analysis routines ensures that the business owner does not need to devote too many resources to anti-fraud efforts.
Also, thanks to machine learning, the AI solution will quickly learn to distinguish between benign and suspicious customer behavior, which cuts down on false positives. This forgoes the need for frequent manual reviews, further reducing the amount of manpower needed.
The business owner is spoiled for choice when it comes to anti-fraud solutions. However, to truly stay ahead of the pack when it comes to protecting their investment while also making sure to reduce their overhead, business owners should definitely look into the myriad of benefits that the proper utilization and integration of artificial intelligence can offer them.