Five Ways AI and Machine Learning Help Prevent Financial Fraud

The sophisticated techniques cybercriminals mean businesses need eCommerce fraud prevention software that can keep up with them. Combining artificial intelligence (AI) and machine learning with fraud prevention software can help to make shopping online safer with less human involvement because AI adds an extra layer of security to detect suspicious activity and combat online fraud.

Faster Pattern Recognition 

AI can analyze patterns over a wide range of transactions and identify possible fraudulent activity. When used with retail fraud 3rd degree solutions, it would be possible to accurately identify fraudulent activity.

Machine learning helps software recognize which unusual activities may be an actual threat and which are false alarms. This means fewer cases of genuine user activity are flagged as suspicious and the review process is faster than when done manually.

Data Updates 

One way to prevent fraud is to schedule regular data updates, which can be done automatically with machine learning and AI. The moment the technology senses new threats, it updates data to provide a new security layer. This can include generating new access codes for users and requiring them to use encrypted messaging to make it more difficult for fraudsters to steal their identity. AI can detect this threat much faster and provide a quick safety solution, even when it encounters new malware.  

 

Comprehensive Behavioral Data

AI can be used in fraud prevention software to collect behavioral data that accurately profiles each user. It provides alternate ways to identify individuals such as measuring the amount of time a person takes to enter their password or monitoring locations where people use their credit cards. These practices are already used, but they can be improved with AI because the screening process focuses on the person making the transaction, not the type of transaction.

Fraud Response 

A lot of fraud prevention software is designed to prevent fraud using set verification measures to detect suspicious activity. When used with machine learning and AI, the software can be enabled to respond to fraud threats in several different ways. And machine learning enables it to learn the right response with every case that it handles. This means eCommerce sites do not need to perform certain fraud management tasks because the software “learns” how to prevent fraud.

Elimination of Human Error 

One of the most common causes of fraud is human error. Forgetting or neglecting a single safety check could allow fraudsters to gain an upper hand. AI reduces the level of human involvement, which ensures fewer or even no errors will result in fraud.

Software developers have made significant progress toward improving the safety of online transactions. Although machine learning and AI are still new, they still provide better fraud prevention than software alone.

Source: https://www.storeboard.com/blogs/business/five-ways-ai-and-machine-learning-help-prevent-financial-fraud/3196958