By Nick Weston, Senior Product Manager Fraud and Security
Consumer fraud losses totaling more than $10 billion in 2023 — up 14% over the past year — signify a serious threat for financial institutions. Certain anti-fraud measures, including check and ACH positive pay, identity verification, and real-time transaction monitoring tools, can help your financial institution significantly curtail fraud. But, beyond these tools, fraud detection technology is becoming more effective by incorporating artificial intelligence (AI) to better predict risky situations and deliver proactive alerts.
Do your fraud prevention tools incorporate AI technology? According to a PYMNTS report, banks or credit unions that use AI or machine learning technologies had 30% fewer transactions that resulted in fraud losses than institutions that do not use these technologies.
Some of the ways AI can help your proactive fraud detection efforts include:
- Analyzing large amounts of data to detect emerging fraud patterns.
- Providing real-time detection to stop fraud before funds leave the account.
- Reducing false positives to more accurately detect legitimate fraud.
- Automating routine fraud detection tasks
- Integrating with other data sources like transaction history, customer demographics, and behavioral data.
- Using natural language processing to analyze text data, helping you identify phishing or social engineering scams.
- Reducing the number of fraud cases.
Learn more about proactive fraud detection tools and how your financial institution can use technologies like AI to help you fight fraud in our white paper, Defray the Rising Cost of Fraud with a Proactive Approach.