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AI in Fraud Solutions: Promises and Realities

Fraud detection and prevention are among the top difficulties for both small and large companies. This is especially true of those involved in the payments industry. It’s a common knowledge that fraud results in negative outcomes for your organization’s bottom line, and causes damage to its reputation. So, how the latest fraud solutions, including those associated with artificial intelligence (AI), can help you avoid these challenges? This article will tell you how and will also help you find a secure processor to work with.

Artificial Intelligence in Fraud Solutions

AI tech has the power to detect bad actors and prevent fraud. However, if companies that rely merely on artificial intelligence in fraud prevention can feel dissatisfied because AI may fail to properly complete the tasks it’s meant for.

AI technology used for automating some facet of fraud prevention may get you into some troubles. According to Robert Prigge, CRO of online mobile payments and identity verification company Jumio, AI can be associated with several complications when used for ID authentication.

Stuart Aston, Microsoft UK’s national security officer, says that AI is befitting combating fraud because it detects patterns and anomalies that can’t naturally be perceived by humans.

With all this in mind, do your best to find a true payments expert like that can help you with the most sophisticated fraud solutions. As the top-rated high risk processor in the U.S. and listed as an A+ company by the BBB, EMB offers the cheapest possible rates and the fastest application in the space.

The cooperation with Verifi and Ethoca enables to provide its customers with unmatched fraud prevention and chargeback mitigation solutions. By the way, EMB is also considered the “Best All-Around High Risk Merchant Account Provider” by ValuePenguin.

How AI Can Help You Prevent Fraud

AI is helpful when preventing fraud in more than one way. E.g., it can help detect irregularities. This way, financial institutions can discover fraudulent transactions and transfers more easily. Specifically, this can be realized through predictive and prescriptive analytics software.

Artificial intelligence and machine learning platforms can be designed to combine supervised and unsupervised machine learning. As a result, it can be possible to deliver a weighted score for any activity associated with digital businesses in less than a second.

In fact, AI-based fraud prevention is increasingly becoming more dependent on the marriage of supervised and unsupervised machine learning. According to Forbes, artificial intelligence should be “Explainable” and “Understandable.”

Let’s first take the so-called Explainable AI. It’s to do with the fields of data science and AI engineering or the creation and coding of AI algorithms. The goal is to give birth to new algorithms to shed light on intermediate outcomes or their solutions.

As for Understandable AI, the latter brings together the technical expertise of engineers and the design usability knowledge of user interface (UI)/user experience (UX) experts. Besides, it also connects the people-focused design of product developers.

Let’s see what AI does to prevent fraud:

  • Doesn’t rely merely on already available experiences: considers developing activities, tactics, and moves in payment processing irregularities.
  • Provides real-time identification of fraud.
  • Prevents attacks by smarter hackers such as refer-a-friend abuse, promotion abuse, or seller collusion.
  • Analysis fraud and provides real-time risk scores and deeper insight into how you can grow sales and reduce fraud losses.
  • Allows digital businesses to keep chargeback and decline rates, as well as operational costs under greater control.
  • Allows digital businesses to sell virtual products, povide a high-quality user experience on a 24/7 with greater consistency.
  • Mitigates the friction customers face by enabling merchants to easily approve online purchases and get rid of false positives as much as possible.
  • Contributes to fraud prevention by not violating internal business policies set by regulatory agencies and agreements with distribution partners.
  • Allows low-margin businesses and product lines to remain lucrative by controlling chargebacks rates that directly affect margins.

To sum up, artificial intelligence and machine learning provide a large scope of applications that businesses can use to combat fraud. All you need is to keep your finger on the pulse and find a reliable and secure merchant services provider so to move forward with fewer obstacles on your way towards success.