How AI Companies Are Gearing up to Mitigate Digital Fraud Amid COVID-19
In this article, see how AI companies are gearing up to mitigate digital fraud amid COVID-19.
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Since the first coronavirus report in Wuhan, China, now it has penetrated in more than 210 countries and territories with 3,066,417 and counting cases. The global economy is being affected by the crisis coronavirus bought. However, digitized businesses, on one hand, are making high profits by taking full advantage of this opportunity in which people are enforced to perform activities in a digital environment. On the other hand, a wide array of cyberattacks are targeting the online business infrastructure. The increased online liveliness and transactions have paved the way for fraudsters that could provide them more chances to perform malevolent transactions by exploiting the online system vulnerabilities.
The digital financial crimes have made off more than 4.2 trillion dollars globally and are expected to increase amid the COVID-19 outbreak. The AI organizations are tapping into innovative and unsupervised learning technologies to reduce the alarming financial fraud by making their detection and prevention robust through Artificial Intelligence. System prevalence can be improved to a substantial level by keeping the online business practices protected from fraudulent access.
The tech companies including Baidu, Alibaba, Huawei, and more are leaning towards employing Artificial Intelligence to fight against the pandemic coronavirus. Tech giant Microsoft offers healthcare bot services to all the organizations that are helping patient screening. The pandemic is responsible for rapid digitization adoption for startups and other businesses that continue to provide services online, thus comes up with a flood of digital frauds and cyberattacks. The digital banking and payment services providers are under threat of account takeover and data breaches, eCommerce under multiple facets of credit card fraud and payment scams, and various cyberattacks.
Account Takeover Fraud: A Challenge for Digital Environment
The increase in digital activities such as shopping, digital banking, and online transactions have increased the threat of cyberattacks in the online world. The year 2019 has been tough with respect to data breaches and account takeover (ATO) fraud. Businesses are in crosshairs due to an increase in ATO fraud amid coronavirus. The cybercriminals are actively targeting a variety of online user accounts such as savings and checking accounts, mobile phone accounts, digital banking accounts, credit card accounts, email accounts, and digital wallets accounts, etc. All these accounts are protected with password user authentication method but the innovative fraudsters find ways to hack them through credential stuffing, malicious script injections, or phishing attacks.
As per Foster’s fifth fraud attack index, ATO frauds are recorded to be increased by 31 percent every year. Amid coronavirus, this percentage is expected to rise three times. According to financial institution executives, about 89% of the fraud in the digital channel correspond to ATO frauds. The confidential personal and financial information of online customers is compromised through unauthorized access which also corresponds to data breaches and identity theft. To curb the increasing cyberattacks, the adoption of innovations and technological solutions are been employed at an industrial level. The AI companies are gaining ground all over the world to come up with digital channel protection measures to mitigate the flood of digital frauds.
Industries Under the Threat of Cyberattacks
The cyberattacks are penetrating into various industries with 50 different types of ransomware attacks recorded in e-commerce, gaming industry, and digital banking and payment services. In 2019, an average ransomware payout value is calculated to 36,295 dollars in quarter two. Credit card fraud, particularly, card-not-present fraud is expected to rise 13% by 2023, which calculates an expected loss of $130 billion to e-retailers. During the coronavirus breakout, this amount will be sky rising targeting each online industry to an extent it could be used for illegal activities. Other than cyberattacks, financial crimes such as money laundering and terrorist funding is increasing through financial institutions and gambling platforms. The escalating scams are calling out the state-of-the-art technologies Artificial Intelligence and Machine Learning to reduce the growing number of malicious activities in a digital environment.
The unsupervised ML and AI solutions are promising in mitigating digital fraud to a substantial level. The financial institutions and all other online merchants are looking forward to adopting innovative solutions that align well with the system requirements and incorporate customer experience along with security.
An Array of Cyberattacks and Digital Frauds That AI Could Control
The strong underlying algorithms and techniques in AI and ML models have the potential for fraud detection and prevention. The passwords and PINs authentication are things of the past. Now, the era is moving towards digitized solutions that could deal with the innovative fraudsters in real-time by identifying the suspicious elements and activities in a digital channel. From system to network security, AI techniques are keeping a strict eye over malevolent actors that disrupt the whole working infrastructure of an organization by attacking them with an array of cyberattacks.
The financial frauds, credit card fraud, and other multiple facets of fraud can be mitigated through a variety of AI-based solutions. AI companies all over the world are vigilant in the production and establishment of strong fraud detection and prevention solutions that employ intelligent technologies and consolidate all the aspects in which a digital environment demands frictionless services.
AI and ML Employed Fraud Prevention
Fraudulent Activities and Pattern Detection
The financial institutions face challenges with respect to transaction monitoring and discarding the ones that are suspicious. The AI and ML models are trained with respect to wrong transaction tracks based on which each transaction will be identified and backtracked to view the path. Also, the automated process will detect the transactions that seem coming or been transferred to the dishonest nodes. Every time, the data generated by financial institutions is then used to teach the models to get high efficiency in future results.
Stronger authentication methods based on AI algorithms are introduced by IT companies. The techniques include 3D depth perception, liveness detection, spoofing checks, and other methods to verify the face biometrics of individuals online. The spoofing attempts of the fraudsters can be mitigated by ensuring their physical presence through minor facial movements such as eye/lip/head movements. Online biometric authentication is reliable as well as a secure method of verifying the identity of customers online.
The AI-based system detects spoofing elements in the user-uploaded to verify the photoshopped elements in the picture. The online payment services are employing this technology to verify their customers through the robust facial recognition process. The overall transaction process becomes streamlined and provides enhanced customer experience and security over online platforms.
Digital KYC and AML for Financial Institutions
Know Your Customer (KYC) and Anti-money Laundering (AML) compliance for financial has always been crucial. It becomes challenging when it comes to performing it on an online channel. It gets more challenging amid the COVID-19 outbreak where all the banking activities have become digital and identifying honest customers among all the hype is a tough job. To cope with this, AI and Fintech companies have introduced digital identity verification methods in which through online document verification, an identity can be verified.
The process is seamless as it takes mere seconds for the end-user to verify the identity and financial institutions can easily comply with the obligations of regulatory bodies. The document verification process employs Optical Character Recognition (OCR) technology that extracts the information from user-uploaded identity documents and verifies the information. If it gets verified, an identity will be verified. Moreover, the process includes detection of spoofing elements in the document to make sure that it is not a fraudulent attempt and the document does not contain any tampering or photoshopped elements.
In this way, AI is paving the road for online businesses and deals with the challenging the industries are facing in the identification of customers and reducing the risk of multiple facets of digital frauds, cyberattacks, and payment scams. AI companies are all up for producing innovative solutions that could align well with the security requirements of today’s digital world.
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