Virender Jeet, Sr. Vice President (Technology), Newgen Software Technologies
Newgen Software Technologies Ltd is a global provider of Business Process Management, Enterprise Content Management, Customer Communication Management solutions with a footprint in over 60 countries, with large, mission critical solutions deployed at Banks, Governments, BPOs and IT Companies, Insurance firms and Healthcare Organizations
The Digital Age has brought along with itself faster transactions, smoother business, and improved customer experience. What remains endemic to it, however, is the fear of falling prey to fraud. In its latest report, a top-level security company has found that cybercrime currently costs the global economy around $600 billion, which translates to 0.8 percent of the global gross domestic product.
Is this to say there's no way around it? Definitely not, and that's where Artificial Intelligence (AI) comes into the picture.
How does AI come in handy in this cyber-crime prone world?
One of the most common types of cyber crime is credit card related frauds, given the exponential rise in the volume of online transactions. The good news is, this is also one of the most preventable types of cyber crime with the use of AI. The use of AI for fraud prevention and control is not brand new, and AI-based solutions have been used to enhance security across several business sectors, including retail and financial.
With every customer, comes a certain set of spending behaviours. This is often used by AI-based solutions to successfully identify behaviours that are irregular, and eventually detect fraud. The volume and speed of financial losses that occur when credit card fraud takes place are humongous, and this makes intelligent fraud detection techniques increasingly important.
"Thanks to AI's ability to track and interpret massive amounts of data, the technology is a promising option in the fight against fraud"
A more evolved model of this solution would be able to use a wide variety of data points to continuously fit different customers and transactions into the categories best suited to them. Hence, as the life circumstances and spending habits of a customer evolves or alters, the model would also alter and evolve what it views as potentially fraudulent transactions. This would, in turn, reduce the number of actual fraudulent transactions and minimize false fraud flags.
If credit frauds take top-spot, data breach comes in at a close second
A well thought out "phish" an attempt to obtain sensitive data, such as passwords, usernames, using fraudulent methods over the Internet or through e-mail can take down companies and individuals alike. In the increasingly digital world, organisations often fail to keep pace with threats, which is why, unsurprisingly, business leaders are turning to AI to help fight fraud.
Data breaches are the unwanted release or unauthorized use of company or customer records, and commonly take place when hackers pass through security covers or firewalls and gain access to records kept by organizations.
Transaction laundering merchant fraud uses legitimate merchant accounts to complete unknown and unauthorized transactions. This helps cover the hackers' tracks, and attacks are largely made on banks, payment processors and companies working with crypto currencies.
Given that the above are only a few among several, and continuously increasing, forms of data breach that can cause considerable damage, it is only natural for companies to increase their investments in cybersecurity solutions. Thanks to AI's ability to track and interpret massive amounts of data, the technology is a promising option in the fight against fraud. The information received post interpretation of data can be used to better understand what separates usual customer behaviour from that of fraudsters. This can eventually help improve defences, reduce false positives and ensure customers receive more convenient and secure online experiences.
Artificial Intelligence holds promise, but sans human intelligence yet
There is no doubt that AI can help flag any fraudulent activity very quickly, often within seconds, and can ensure possible crime be stopped or spotted immediately. However, all said and done, human intelligence still remains essential to both organizations as well as AI. It is not unlikely that we will soon reach the point where a fully automated, AI-based security system will be effective enough to eliminate a high percentage of fraud without any human input. But, as of now, organizations still need a pair of human eyes which work in combination with AI-based solutions to help slowly and steadily eliminate fraud.