Is Artificial Intelligence effective in fighting fraud?

In short, yes, Artificial Intelligence is effective in fighting fraud.

It is already preventing a lot of fraud and is expected to dramatically decrease all cases of fraud in as little as 4 years.

With changes in technology comes new ways for fraudsters to go about their work.

Artificial intelligence (AI) may be the only way to combat this.

New technology is great.

Whether it is the latest iPhone or software which makes running your business more efficient, we crave it.

Every time a new update or bit of tech comes out, there comes new ways for fraudsters to exploit it.

Take your phone, for example.

How many times after a big update do many little updates come out to fix the bugs and potential privacy risks?

This is because it is nearly impossible to release new technology without missing something.

Which can lead to anything from a small bug to a mass leak of data.

This is where AI comes in.

So, what is AI is doing to help?

Many companies now have access to software which can trace all invoices and transactions.

As well as detecting when fraud appears to be taking place.

This means that if your credit card details are stolen, banks can easily detect unusual behaviour.

For example:

Someone tries to buy something using your details from another country, freezing your account.

Saving you from stress and loss of money.

Some of the best AI is even able to locate and point out documents which are at high risk of fraud.

So you can take measures to secure it.

All this is generally done with one of two types of AImachine learning and deep learning.

Where robots are taught to recognise irregular spending and then report it early.

AI is not perfect, however.

Despite advances in Artificial Intelligence, there are still many cases of fraud.

According to Financial Fraud Action UK’s Fraud the Facts 2017, the amount of fraud losses on U.K. issued cards has increased every year since 2012.

Which shows that despite the more wider use of AI to combat fraud, the fraud rates are still increasing.

Fraud the Facts 2017 also found that using AI to detect fraud prevents only 64% of fraud.

Although it shows progress, it also leaves a large amount of money left unaccounted for.

It is not all doom and gloom.

It is nearly impossible to stop all fraud as the criminals involved will always find new ways to do it.

So AI is extremely useful at limiting the amount of fraud and limiting the damage fraudsters can do.

Some more good news is that in Fraud the Facts 2018.

It was reported that the amount of reported fraud had dropped by 8%.

This is the first drop in 6 years and shows that Artificial Intelligence is effective in fighting fraud.

The Future of AI

Info security, has predicted that the use of AI for fraud detection will triple by 2021.

Rainbird says that this could save companies a collective £7 billion by 2023 and that AI will be able to prevent at least 80% of all fraud.

This means that fraudsters will be less likely to try and commit fraud.

It should be increasingly hard to overcome AI when it is as powerful as it is by 2023.

So is Artificial Intelligence effective in fighting fraud?

Yes, it is.

What are your thoughts?

Get in touch

Post by Barney Dunnett

Barney worked for iTESOFT for a week’s work experience in 2019, where he took a keen interest in artificial intelligence and how it is used to combat fraud.

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