Today, technology is associated with every sector of the economy. The finance sector is no different. From financial transactions to customer experience, technology has taken up a big chunk in the financial services sector. It is necessary for companies, especially in the finance sector, to invest in new technologies for fraud prevention in banking.
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When COVID-19 wrecked down the world economy, new opportunities surfaced for many businesses. It also applies to hackers. The dollar amount of attempted fraudulent transactions rose 35% in April 2020 — in the midst of the global pandemic — according to the Fidelity National Information Services Inc., a banking fraud detection company.
Shift to online platforms has been speeding up the digitalization of business and commerce worldwide. Many people who were earlier skeptical about e-commerce and preferred to stay away from it are now feeling safer to conduct digital transactions. It has caused a lot of inexperienced users to be a victim of fraud. It is becoming difficult for companies to deal with the increasing rate of digital fraud in banking.
Therefore, companies in the financial payments services sector should invest in AI as their ultimate weapon.
Read more about the benefits of AI.
The question arises as to why AI is perfect for fighting digital frauds in banking. AI provides the scale and speed needed to take on challenges such as reducing false positives, preventing fraud attempts, and reducing manual reviews of potential payment fraud events.
Here are some of the reasons why AI is perfect for fighting technology frauds in banks: –
- Payments fraud-based attacks and AI: – The payments fraud-based attacks are complex and change their unique structure, pattern, or sequence, which makes them undetectable. Well, this is not the case today! AI and machine learning make it easy to detect fraud accurately. The model can be trained to detect more than one fraud within more than one type of transaction or application. As the technology frauds in banks increases and evolve, AI is needed to confront these challenges.
- AI brings scale and speed to the fight against fraud: – AI provides digital businesses with the advantage in battling the various risks and forms of fraud. AI also helps in payment fraud detection along with bank fraud prevention and detection. Due to higher efficiency and speed of information processing, machine learning (a subset of AI) algorithms can find sophisticated fraud traits that humans cannot detect.
- AI’s various predictive analytics and machine learning techniques: – These techniques are perfect for finding anomalies among large-scale data sets in seconds. A cool feature of machine learning is that the more data it has to train on, the more accurate its predictive value. It is especially true in the case of payments fraud detection, where AI learns what legitimate and fraudulent transactions look like from a contextual intelligence perspective.
In conclusion, the selection of the right technology for bank fraud detection and prevention is “the first step.” AI is still scratching the surface when it comes to the financial services sector. AI incorporates several algorithms, such as supervised learning, unsupervised learning, knowledge graphic, etc. These different algorithms help in differentiating multiple fraud detection.
to learn how vTech Solution, Inc., support you with your tech-related worries in 2021.
Also, check out 5 benefits of Fraud Detection and Prevention Solutions for your Finance Organization.