Effective solution using Artificial Intelligence (AI) to detect and prevent fraud in real-time
The Fraud Problem
Fraud has become an ever-increasing menace to banks and their customers, costing billions of dollars each year. Instead of high-tech hacking, fraudsters now use social engineering to perform scams such as fake invoice, CEO fraud and business email compromise (BEC), among others. Social engineering attacks and scams resulted in a global loss of $26 billion in 2019.
Whilst some banks take a position to refund their customers, others do not, citing the customers liability for initiating the transaction. Either way, banks are losing profits or customer trust.
Challenges with existing fraud prevention technology
Banks using rule-based fraud systems to fight fraud experience the following challenges:
- Rules only detect the known fraud scenarios that have occurred in the past, leaving the bank unprotected against new scenarios for which there is no rule configured
- Due to the high number of false positives generated by rules, more staff are required to perform investigations
- There is a high human cost to continuously re-segment customers into groups and configure new/update existing fraud rules for each group
- Customer complaints resulting from their fraudulent transactions not being detected and blocked, or due to their legitimate transactions being blocked too frequently
Breaking the rules with AI
Artificial intelligence has enabled banks to more accurately detect fraud while minimizing false positives. Powered by NetGuardians’ AI technology, the solution works by understanding the normal payment behavior of each customer and uses behavioral risk models to detect fraudulent transactions that are outside the norm. For instance, scams are detected on customer accounts due to a combination of unusual factors such as unusual amount, new beneficiary, new receiver bank country, new currency, new operation type etc.
The reasons behind blocked payments are explained in one user-friendly dashboard. NetGuardians’ innovative approach enables banks to not only prevent payment fraud in real time, but also detect emerging payment fraud schemes accurately and efficiently.
Compared with a rules-based controlled environment, banks using our solution can expect to achieve:
- 83% fewer blocked payments (false alerts)
- 18% increase in fraud detection
- 93% less time spent on investigating alerts
- Greater fraud scoring accuracy with NetGuardians’ Collective AI database
Go live within weeks – FusionFabric.cloud
Typically, acquiring and implementing an innovative AI solution requires a complex project taking over a year to go-live. However, through FusionFabric.cloud, this solution is already integrated and waiting for your bank to activate in just a few weeks.