The need to counter fraud seems to have become more than before, especially with digital influence finding its way into daily lives. To ensure cutting-edge cybersecurity, artificial intelligence (AI) has become crucial to understanding unpredictable paradigms for preventing fraudulent outcomes. “I believe AI/machine learning (ML) can analyse vast amounts of data in real-time, identify patterns, and detect abnormalities and irregularities. It can learn what’s normal and flag anything suspicious, making fraud detection faster and accurate. Companies such as Microsoft, Meta, Amazon Web Services (AWS), among others, seem to be investing heavily in the research and development of smart systems capable of detecting evolving fraud patterns,” Yuvraj Shidhaye, founder and director, TreadBinary Technologies, a research and solutioning platform, told FE TransformX.
From what it’s understood, AI-oriented fraud detection refers to the supervision of received data before the onset of fraud can happen. Going by market research, AI-oriented fraud detection can ensure benefits such as the ability to predict better outcomes with time, like in the case of DataDome AI which shares information of new fraudulent paradigms with other DataDome AIs, along with real-time detection and shorter reaction periods to incoming threats. Data from the “2023 Currents” report by DigitalOcean, a multinational technology company, found that 37% of respondents directed more investments towards advanced security software’s acquisition. The report by DigitalOcean also mentioned that 43% of the participants were making use of AI/ML applications, at both personal and professional levels, along with 78% stating that their range of AI/ML utilisation would increase in comparison to the previous year. Furthermore, the report highlighted that 45% of the participants mentioned AI/ML applications bringing convenience to their jobs, along with 27% specifying how the tools enable better execution of critical duties. However, 19% of the respondents emphasised the need for proper protection before making use of AI/ML tools. In terms of areas for deployment of AI/ML by businesses, the report found that 47% utilised it for software development and coding, 34% for data analysis and insights, 27% for process automation, 24% for marketing, especially for email writing, 21% for customer service and engagement, and for product recommendations, other user experience enhancements, and sales stood at 12%, 12%, and seven percent, respectively.
“From a business standpoint, powerful analytics and pattern recognition capabilities provided by AI/ML technologies are considered essential in thwarting high-level frauds. I think it is critical to cultivate an organisational culture of data literacy and awareness. This can entail teaching interested parties about the possibilities, constraints, and moral issues around AI and ML. In order to guarantee data security, compliance, and quality, data governance structures should be established. For creating a workforce with the skills and knowledge of AI/ML technologies, it is believed to be imperative to invest in talent development and training programs. Furthermore, encouraging cooperation between business, academia, and governmental organisations can help hasten innovation and tackle shared problems,” Jaibir Nihal Singh, co-founder and CEO, TraqCheck, a software-based background verification platform, highlighted.
Numbers provided by Future Market Insights, a market research provider, predicted that international AI in the fraud management sector to attain a $10,437.3 million valuation in 2023 and is expected to clock $57,146.8 million by 2033, at a 18.5% compound annual growth rate (CAGR) for 2023-33. Market experts believe that companies such as Microsoft, Meta, AWS, among others, have made increased investments towards research and development (R&D) to better smart mechanisms and heighten their dependability and security. For example, AWS provides cloud-based services to build and scale fraud detection. According to data provided by NVIDIA, a multinational corporation and technology company, fraud detection is the most important reason behind financial service-based businesses making AI-oriented investments. With regards to financial frauds, Microsoft has come up with AI applications to prevent them such as the Microsoft Cloud for Financial Services, which enables banking and other institutions get access to different AI algorithms, with Chargebacks 911, a chargeback management company, Abu Dhabi Islamic Bank, an Islamic banking company, Mastercard, a financial technology (fintech) firm, among others, availing services. Misinformation is regarded as one of the biggest instigators of fraudulent practices and in that respect, Meta deployed new AI mechanisms, such as the ObjectDNA and SimSearchNet++.
“We expect that the use of AI in fraud prevention in all sectors (ranging from insurance to banking to e-commerce) will increase. Most of our larger clients are in the process of implementing or piloting the use of AI in this space, and we expect this to increase. A lot of industry players seem to be increasingly using AI to detect fraud patterns with an increase in detection and a reduction in false positives. A huge improvement in efficiency has been reported, generally,” Mathew Chacko, partner, Spice Route Legal, a telecommunications, media and technology law firm, concluded.
