A recent report titled “Fast Finance and the Fight Against Fraud” explores the rise in fraud and the efforts to combat it in the financial sector. Key findings in the report highlight the following:
- Fraud Surge: Fraud has been increasing at a rapid pace in recent years, with a particular focus on targeting young consumers and financially strained individuals.
- Young Consumer Vulnerability: Approximately 47% of retail banking consumers under the age of 40 have experienced some form of banking fraud. This underscores the vulnerability of young people in the digital age.
- Financially Overextended Individuals: Half of those who are financially overextended, meaning they have more debt than they can repay, have also fallen victim to fraud.
- Technology as a Defense: Financial institutions (FIs) and banks are combating fraud by leveraging advanced technologies like artificial intelligence (AI) and machine learning (ML).
- AI’s Role: AI and ML technologies assist FIs in identifying and assessing common types of fraud, providing standardized insights into fraud patterns, and enhancing user authentication protocols to detect unauthorized users earlier.
- AI in Action: Some British banks have partnered with Mastercard to use AI to predict and prevent fraud moves before they occur, potentially saving millions in fraud-related losses.
- Positive Results: FIs that have adopted AI and ML technologies in their fraud prevention strategies report lower rates of fraudulent transactions and are less susceptible to overall increases in fraud rates.
- A Combined Approach: While AI is valuable, organizations may benefit from combining traditional rules-based processes with AI and ML for a more comprehensive approach to fraud prevention.
The report emphasizes the need for a balanced approach that combines old-world rules with newer AI and ML technologies to effectively combat fraud in the financial sector.
By FCCT Editorial Team
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