Whether it’s fraudulent phone calls, fraudulent text messages and emails, fake websites, falsified documents or bogus insurance claims, fraud has become big business – and big problem. .
In the first half of 2021, criminals stole a total of more than £753m through fraud, a 30% increase on the first half of 2020, according to data from banking industry body UK Finance.
The problem will only get worse, according to Martin Rehak, founder and CEO of Resistant AI, a company whose artificial intelligence technology helps detect malicious behavior.
“Today’s fraud problem is primarily a problem of scale. Traditional problem-solving methods that rely heavily on human intervention are like taking a knife to a gunfight,” Rehak said. AM City
“Fighting fraud is becoming increasingly complex, thanks to the speed at which fraudsters are adapting and refining their methods.”
This sets traditional banks and fintechs off when it comes to proactively detecting fraud patterns in the huge volume of transactions they process daily.
Paypal’s recent revelation that it had 4.5 million illegitimate accounts on its network is a perfect example of the challenges businesses face.
“The fraud and cyber analyst teams are simply overwhelmed by the ever-increasing number of alerts, many of which are fake,” Rehak pointed out.
AI and machine learning
With a doctorate in artificial intelligence and more than two decades of developing intelligence-based security solutions, Rehak knows firsthand that to effectively fight financial crime, the only solution lies in the use of artificial intelligence. sophisticated and machine learning.
“Sophisticated AI is able to predict, detect and defer financial crime using multiple algorithms to detect patterns of fraudulent behavior in real time.”
Today’s sophisticated artificial intelligence technologies are excellent at spotting anomalies, Rehak continued.
These can be behaviors that deviate from the norm or related to changes in devices or contact information and unusual changes between accounts. These are all indicators of criminal activity, he explained.
“The combination of AI, automation and the human brain is the most powerful form of defense against cybercrime.”
“When an alert is triggered, experienced human analysts can then step in to deduce the attackers’ motives and respond appropriately.”
“At the same time, the vast majority of valid transactions are authorized because AI techniques are very precise in separating good from bad.”
The financial industry will need to redouble its efforts to mitigate risk as fraudsters change methods and goals, Rehak said.
“The pace at which the threat landscape is changing means companies need to adjust their approach if they are to be successful in combating fraud.”
Rehak is convinced that fraud is here to stay and that criminals are getting smarter.
“They steal our identities to make purchases, they steal our bank accounts, they make fraudulent insurance claims on our behalf and they rip us off,” he concluded.