If you think business operations are transforming rapidly, then yes, you are 100% correct! Artificial Intelligence has come into the picture and is a big help in business transformation. As quoted by Amir Husain, founder, and CEO of a Machine Learning Company, in an article on Business news daily, “Artificial intelligence is kind of the second coming of software”.
Artificial intelligence is not replacing human intelligence, but it is taking the role of a supporting tool that helps to analyze and synthesize information in a way that can help a human user. In business operations, AI is helping humans carve out possible outcomes of each action and contribute to the decision-making process.
Here, I’m going to shed some light on how AI will be playing an important role in fraud detection.
As per the Association of Certified Fraud Examiners (ACFE) inaugural Anti-Fraud Technology Benchmarking Report, the amount organizations are expected to spend on AI and Machine Learning to thwart online fraud is expected to triple by 2021. The ACFE study also found that only 13% of organizations currently use AI and Machine Learning to detect and deter fraud today.
Businesses today are facing newer challenges than they have ever faced before. Organizations have become more vulnerable to fraud with the increasing digitization in operations.
Given the complexity of these organizations, traditional means of detecting fraud aren’t going to work anymore. There is an imminent need for Artificial Intelligence and Machine Learning in fraud detection & prevention.
Why should businesses use Artificial Intelligence and Machine Learning in fraud detection?
- Speed – Speed in detecting fraud is of utmost importance. If fraud can be detected faster, the solutions to tackle it will also come out faster. This will not only help in fraud detection, but it can also help in fraud prevention. Ideally, AI should be able to help detect fraud ahead of time and help businesses take corrective action before they happen.
- Scalability – Scalability can only be achieved by AI. Machines can analyze data faster than human minds. Not only faster, but it can assess and analyze the mass. The bigger the data, the bigger the need to have AI analyze it. AI can easily analyze bigger data sets and provide insights on how to detect fraud and help you take corrective action in preventing it.
- Efficiency – Efficiency is very important while analyzing any data set as that is what will define the accuracy of the insights. AI can provide these insights in a far more efficient way than human minds and will have lesser chances of errors. AI should be able to help with the cost efficiency aspect as well as operational efficiency.
Fraud is inevitable. No matter how fool-proof processes are made, fraudsters are going to find newer and clever methods to game the system. Losses to organizations will be great if these fraudsters are successful. It is safe to say that AI will not only bring out best practices in fraud detection but also help in the prevention of activities that lead to fraud.
According to the Anti-Fraud Technology Benchmarking Report, in the next year or two, more than 25% of organizations plan to adopt AI in business operations. Investing in such technology is more important now than ever!