These days, the security of companies’ business data and the prevention of financial fraud attempts are staples of international conglomerates interested in keeping their reputations intact. A successful fraud attack could devastate a brand’s reputation, as customers will think twice before trying that company’s products or services. Moreover, depending on the industry or field of activity, a potential data breach or a successful fraudulent financial attempt could culminate in legal repercussions.
For many modern firms, investing in fraud detection and prevention tools is a priority. But the 21st century has been characterized by technological advances, and the AI revolution, which we’ve all experienced in recent years, is at the heart of some of the most well-researched online security measures available, as well as some of the most advanced online fraud methods. It seems increasingly likely that the next few years will constitute a cat-and-mouse game between malicious actors and cybersecurity firms. And investment in highly-dependable security measures will be more necessary than ever.
To detect fraud in 2023, it is critical to invest in advanced, upgradable tools that keep pace with industry trends while staying abreast of the latest methods used by fraudsters interested in stealing confidential customer financial data. AI is a blessing and a curse for modern companies looking to expand their services nationally and internationally. And investing in an online fraud prevention program that uses AI for pattern recognition could pay for itself after just one successful fraud detection and prevention application.
Why Do It?
As is often the case in the business world, the main reason lies in financial considerations. In addition to the significant sums that can be lost directly by not preventing fraudulent activities, failing to detect fraud could lead to reputational losses for companies, which in the long run could have a much more significant financial effect than the amounts stolen. If, for example, the targeted company is active in the financial sector, then in addition to the money that would have to be repaid to customers, it is possible monetary authorities could also fine the business.
Fraud detection and prevention tools may be the most effective way to detect early multi-stage attempts before they affect the productivity of your internal processes. If a fraud attempt on your systems is successful, all of your company’s processes will most likely be halted until a clear assessment can be made regarding the size of the breach and its impact on customers. What does this mean? Lost revenue, which is something that nobody in the business world wants.
Considering that cyber fraud attempts are up more than 80% compared to pre-pandemic levels, the importance of investing in a professional fraud detection measure, especially one that uses AI, is crucial and could be an essential factor in maintaining your enterprise’s continuity. From phishing attempts to social engineering, fraudsters can use a plethora of methods to access confidential data. And AI can be a tool to disrupt many of their efforts and detect fraud before significant damage takes place.
How Can AI Help?
Businesses have more user data than ever. But this also means that the training models used to implement anti-fraud AI tools are extensive and upgradable. Algorithms used by cloud-based AI tools can be leveraged to monitor huge volumes of user data in real-time. This can then be compared with internal models to discover patterns in potential fraudulent attempts. Usually, these attempts’ detection rate is around 85 to 90% for conventional fraud-detection methods. But with AI, these figures can rise to 98, or even 99% if sophisticated machine learning models are used.
AI tools can detect real-time anomalies in companies’ internal systems, find patterns in phishing attempts or wire scams used by fraudsters, analyze users’ behavior and transaction history to uncover potential takeover attempts, and use NLP methodologies to detect fraud where traditional prevention methods are limited. But beyond these elements, AI can continuously spot scams, and its effectiveness will only increase as the data set it has access to grows.
AI Can Also Be the Enemy
AI algorithms are excellent at detecting patterns that bad actors can use to gain access to confidential customer data. Sadly, fraudsters can also exploit neural networks to take their methods and techniques to the next level. AI can detect fraud, but simultaneously, it can automate many of the tasks required in a successful cyber or financial attack that would typically require manual input. AI can underlie successful DDoS attacks, find vulnerabilities or patterns in user behavior that can be exploited in social engineering raids, and facilitate spear phishing methods that target precise individuals or organizations.
With the help of AI tools, the voice or even the appearance of targeted individuals could be copied, making the work of human operators harder than ever. Novel techniques could be created to evade the detection methods used by most fraud prevention programs, and algorithms could be used to speed up password-cracking processes. In other words, AI can take fraud attempts to a new level. For this reason, using AI Fraud detection and prevention tools is a must. Fighting fire with fire, as one might say.
It Can Be Crucial to Your Business
Due to the increasing volume of confidential user information gathered by companies, data fraud is at an all-time high. And the same rings true for attempted financial fraud, which any company with national capital has to deal with on a daily basis. An AI fraud detection and prevention tool can be a crucial instrument in detecting and analyzing phishing attempts, credit card, or chargeback frauds, which generally could cripple the reputation of enterprises.
A professional AI tool could detect fraud even before it can have an effect on your company’s financial data, flag suspicious activities for future enforcement, keep a fraud probability score for each financial transaction, or use neural networks to take your business’s cyber prevention capabilities to a new level, all while helping to create new methodologies applicable to your human staff. Investing in AI cybersecurity tools has become a necessity. And the interconnectedness of our world will make their use a daily reality for national or international conglomerates.