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How AI is Revolutionizing Fraud Detection

How AI is Revolutionizing Fraud Detection

AI is revolutionizing fraud detection

Artificial intelligence – commonly known as AI – means a form of technology with multiple uses. As a result, it has become extremely valuable to a number of businesses across various industries in ensuring the best products and services can be provided, while also maintaining security.

In fact, it arguably creates a greater impact on the security and safety of everyone that uses it. With more and more of the world and business conducted online, cyber-attacks have become more prevalent. AI, though, has the power to prevent them from happening, including fraud detection.

It can detect when fraudulent activities are taking place, and do so in an instant. Before the technology was widely available, it would take up huge resources and be time-consuming. The challenges posed by trying to detect whether something included fraudulence involved a lot of time. But, these issues no longer present themselves.

This is because AI can analyze data immediately, recognize and identify any patterns that may show signs of fraud, and then predict what may happen, thus giving industries the best chance to stop it from happening before it is too late and within a good amount of time.

Which industries have benefited from AI in fraud detection?

As highlighted, the number of cyber-attacks has continued to be on a steady rise. Many are targeting money, while others will look to steal identification data. As a result, there are a number of industries that have looked to use AI to help them combat any potential attacks.

Financial Services

The financial services industry – which includes banks and financial institutions – is one of the biggest users of the technology. The businesses within this sector utilize machine learning algorithms to help them identify any suspicious activity. This can alert them in real time.

Money laundering, identity theft, and credit card fraud can all be spotted easily with the use of the tech, helping the business to save time and money, while also ensuring their customers are protected, too.

iGaming

AI technology is also being adopted by the online gaming industry for fraud detection purposes, among others. Since this industry deals with large sums of money daily and continues to attract hackers who attempt to game the system by cheating, security becomes an important consideration.

They will adopt the technology for games such as jackpot casino slots, table games, and even for their live dealer titles. By doing so, they ensure a fair experience for everyone, while also protecting sensitive data.

Retail & e-Commerce

One of the industries to have boomed following the evolution of the Internet is the retail sector. This is especially due to the e-commerce industry having been created. Nonetheless, while more people are now shopping online, there is a huge appeal to those who conduct unethical activities.

Retailers use AI to help them analyze certain behaviors and patterns made regarding purchases. This can then help them to highlight whether there is any fraud taking place. By doing so, they then protect themselves from financial losses potentially incurred as a result.

Insurance

Insurance claims that could be considered fraudulent are one of the main areas where AI has played an essential role. People have made false claims in hopes of receiving payments, so AI has helped the industry combat and limit them as much as possible; by spotting suspicious behavior while anticipating potential mishaps.

AI allows insurers to identify potentially fraudulent cases as soon as they occur so that more money remains for customers with valid claims.

AI has had a huge impact

The above industries are among the biggest to use AI to help them combat fraudulent activities. Yet, they are by no means the only ones to be using the technology and benefiting from the advantages that it continues to provide them with.

With more and more online scams being made today – which are only likely to increase in the future as technology evolves – businesses and market sectors need to ensure they are best protected as possible against any cyber-attacks that may be experienced.

The use of AI certainly made it easier to spot them and identify when a scam takes place. But, this could only be the start as it is only expected to get better with time.

DevX Editor

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