Fraud Analytics: Challenges and How Artificial Intelligence Can Solve Them?
Since the inception of the concept of the online market, more and more businesses and people are approaching this platform for buying and selling purposes. When people go online to shop, they risk themselves to online fraud. Online fraud is becoming very common these days, and despite how careful you become, there can be instances when you can also be its next victim.
Since fraud can be of varied types, its detection becomes the biggest problem. Additionally, even if someone gets successful in detecting, there can be several challenges one may face in the process. Let’s look at some of them.
Challenges faced during fraud analytics
There can be different kinds of challenges that a company or an agency faces while dealing with fraud cases. These challenges may even differ with the industry and the fraud committed. Here are a few of the challenges for your reference:
- Change in pattern
Fraudsters are looking for new ways of committing crimes and fraud, making it difficult for fraud analytics solutions to catch them. It impacts the overall performance and efficiency since the entire mechanism must be changed and redesigned to adapt to the latest developments.
- False fraud-positives
The most difficult of all the situations is when there is a legitimate fraud, which is considered false. In most scenarios, real frauds are left unattended and are not detected.
- Time-consuming investigations
Imagine solving a fraud case; there are multiple stages and people involved. Since there are so many departments and people investigating the matter, chances of missing out on pieces or ignoring details are possible. Therefore, by the time the investigation reaches the end, it is already delayed in being detected.
How can Artificial Intelligence solve the problem?
AI has helped businesses handle and detect fraud and is a significant way to avoid financial crimes. With the help of artificial intelligence, one can easily track a large amount of data and detect something suspicious instead of going through each set individually. Moreover, with the use of AI, businesses can analyze real-time data.
Listed below are some of the ways through which artificial intelligence can offer its assistance to businesses:
- Real-time data access
Frauds can happen across any industry and department at any time. Therefore, it is important to access and work on real-time data to curb or eliminate those frauds. As a business, you can take the help of artificial intelligence services, and real-time data monitoring and processing becomes very convenient. Additionally, when you have real-time data analysis, it will be easier to flag any suspicious activity.
- Helps in the easy interpretation of data
It is very difficult to work with large datasets, especially to detect fraud based on past trends. In such a scenario, AI helps create models that can aid in the easy interpretation of data by checking consumer behavior and distinguishing suspicious trends from legal ones.
- Quick resolution
There are two stages of fraud prevention; the first is when the company creates a method of detecting fraud. The second stage is to prevent fraud from happening in the future. Now, even if you are successful in the first stage, chances of succeeding in the second stage are difficult unless you have a quick resolution team. Therefore, in this scenario, AI can help by automating the processes. Algorithms used by AI can help automatically approve or reject a financial transaction easily, thus saving fraud.
Wrapping up
Fraud is becoming very common these days, and anyone can be a target of it. You don’t have to make a mistake to become a victim; even after taking all the precautions, you can be the next one on the line. Though companies face certain challenges in detecting fraud, using artificial intelligence can help in solving these challenges to a great extent.
