emerging
AI-Driven Fraud Prevention
Artificial intelligence (AI) is playing a crucial role in both perpetrating and preventing fraud, leading to a technological arms race in the payments industry.
Timeframe
near-term
Categories
Subcategories
Detailed Analysis
While fraudsters are leveraging AI, particularly Generative AI (GenAI), to enhance scams and manipulate customers, financial institutions are simultaneously using AI to develop more sophisticated fraud detection and prevention models. This creates a dynamic interplay between AI-powered fraud and AI-powered security. "Using Generative Al (GenAI), individual fraudsters can perform more sophisticated and scalable fraud without a significant increase in time or resources required."
Context Signals
GenAI could enable fraud losses to reach $40 billion in the US by 2027.
Mastercard's AI solution increased fraud detection speed by 300%.
Visa achieved an 85% reduction in false positives using AI.
Edge
The development of explainable AI (XAI) will be crucial for building trust and transparency in AI-driven fraud detection systems.
The increasing use of AI in fraud prevention may lead to a shift towards more personalized and dynamic security measures.
