Five ways AI can help Detecting and Preventing Cross Border Fraud
by Team Assurety
Published on July 03, 2024
5 min read
Unveiling the Future
Part 03 of a ten-part series on Leveraging AI to solve complex business problems.
As part of our commitment to keeping you informed on the latest advancements in AI technology, we’re excited to share our article in the AI Insights series.
Introduction
As technology solutions get sophisticated, criminal organizations have developed newer more superior means to avoid detection. In a globalized world, service providers engaged in cross-border transactions must modernize their means of detection and adopt preventive measures by using technology at scale. Artificial Intelligence is an unavoidable answer to these questions and provides unrivaled abilities for preventing and detecting cross-border fraud.
There is a whole spectrum of fraud types though major ones include financial frauds, parcel and mail fraud, cybercrimes, and identity-related frauds. Among outdated technology and deficiency of automation, organized criminals also rely on a lack of regulatory frameworks, loopholes in the implementation of laws, and limitations of jurisdictions. No wonder, the amount lost to different fraudulent activities in 2023 rose 5.3% compared to H1 of 2022.
AI as the game changer;
The capability to yield insights from large datasets at unbelievable speed has been proven as an effective tool for detecting fraud. Below finds the top five ways AI is used in modernized public and commercial organizations;
Due to COVID, more users turned to the internet, and e-commerce activities saw a tremendous surge. This surge exposed vulnerable users and acquiring and abusing cardholder’s information became easier for fraudsters. These complex breaches can be stopped by preemptively detecting anomalies and responding/verifying users at lightning speeds. That’s where AI and machine learning are a game changer, with quick analysis capabilities and pattern recognition that identify probable breaches and attacks.
1. Recognizing patterns with AI:
Artificial intelligence recognizes patterns and outliers in huge datasets, identifies user behaviors and identify deviations that result in fraud. This preventive capability empowers our institutions to identify anomalies before they happen.
2. Behavioral Anomalies:
From mouse movements to general digital habits, AI examines and develops a unique user profile. Continuous recognition of patterns enhances accuracy in detecting anomalies an individual may exhibit. These anomalies trigger alerts and prevent various actions/transactions from happening in real-time or prevent unauthorized use.
3. Predictive Analytics and ML:
With the help of data accumulated over time with important data points, patterns and anomalies, machine learning algorithms predict frauds that can happen. With time and reprocessing data of successful predictions and failures, the model gets smarter, accuracy is increased, and false positives are reduced.
AI has propelled the results of ML by automating tasks like feature engineering, hyper parameterization, and choosing correct models. AI has automated many manual ML tasks along with AI-driven monitoring and feedback mechanisms resulting in more accuracy.
4. Natural Language Processing (NLP):
Cross-border fraudulent activities rely on communicated messages and transactional information. With NLP, AI can recognize doubtful content in communications we use in routines like messages and emails, etc.
5. Using Blockchain:
Blockchain used alongside AI, helps in unassailable and transparent transactions resulting in robust ledgers that make it nearly impossible for fraudsters to alter. Many banks, fintech, and financial institutions leverage this additional security layer when conducting international transactions.
Business Intelligence & Analytics | Investigate, Report, Adapt and Succeed
Assurety’s Contraband Fraud Detection Service:
- Ready-to-go backend platform with existing data structures, cutting development and deployment time.
- Risk-based detection and reporting, helping manage package influx.
- Enhances operational efficiency by improving accuracy and decision-making.
AI Systems in Action
AI has set in motion the advancements that can prevent fraud from ever happening. However, unlike fraudsters, organizations must deal with the ethical implications of adopting AI and regulatory frameworks in different regions. There has been much debate on utilizing AI while safeguarding personal rights and privacy laws.
What’s Next?
AI can bring the most robust defense against cross-border fraud. The ability to evaluate, implement, and prescribe alerts quickly and on a large scale is the key. Organizations across the world need to embrace these capabilities and play their role in fortifying against such frauds.
There is no doubt that AI will enable a secure global environment and crush cross-border fraud. This is the start, and much must be done by governments, global regulatory and cybersecurity organizations for integration of AI in their daily operations.
Upcoming in the series
Part 04: Transform your mail and parcel delivery using Artificial Intelligence
Part 08: 
Part 6: Demystifying the Maze- Navigating the Types of AI and Recent Advancements
Part 7: How AI is helping with Credit Card Fraud?
Part 8: Revolutionizing Postal Security- AI’s Role in Combating Fraud
