Knowledge sharing
October 10, 2023
AI for fraud prevention: friend or foe?
Many believe that AI is a game-changer in the ongoing fight against fraud. Surely, AI can help recognize fraud by swiftly identify transactions in a distant location be it a device fingerprint, or changes in the user behavior or biometrics that flag suspicious activity. Even more, AI is a great helper in real-time transaction monitoring and can instantly assess the transaction, cross-referencing it with known fraud patterns.
However, the other side of the medal showcasing the dual nature of AI, is that it also opens up new dimensions for potential attacks. AI is being trained to mimic legitimate users behavior, making it close to impossible to distinguish between genuine and fraudulent activities. AI can analyze huge amounts of data with incredible speed to create tailored phishing messages that target one's vulnerabilities.
Knowing Your Transaction (KYT) is therefore becoming a key player in the world of transactions handling. Risk-Based-Scoring mechanisms, now power-boosted by AI, are essential to supporting the legitimate parties to label transactions. The goal here is simple: to figure out whether extra safety measures are needed and how much additional control should be applied. After all, it is a balanced act between security, risk, and user experience.
Traditionally, the approach to mitigating and preventing attacks has been reactive, triggered by historical incidents. However, with the remarkable evolution of AI, we are moving to a new way of doing things. Can we leverage AI to anticipate and mitigate potential attacks before they event start? Thereby shifting from a reactive approach to a more forward-thinking and proactive one?
One thing is clear: the path ahead is as challenging as it is promising. Still, we believe that in good hands, AI can help reshape the payments industry's defense against emerging threats.
What are your insights on this? We are curious to hear your thoughts!
