Most enterprises today are eager to leverage the power of automation in order to improve enterprise functionality. In the world of digitalization, the threat to a company’s security is massive, making it difficult for enterprises to ensure data safety. This is where artificial intelligence (AI) comes into play. Using AI, businesses can analyze documents, automate fraud detection, and manage regulatory compliance – all in real-time. This article will delve deep into how AI can be used for better compliance and fraud prevention across industries.
What is Fraud Prevention?
Fraud prevention is a strategy commonly used to identify fraudulent activity while preventing any financial or reputational damage to enterprises. With the digital boost in online banking, there has been a considerable increase in fraudulent activities in recent times. Enterprises are often combating the dangerous possibility of losing their data or having their details leaked. A strong fraud prevention strategy is required to streamline the workflow of enterprises, especially in the finance and banking domain. More and more business owners today are embracing artificial intelligence to prevent economic and reputational repercussions stemming from cyber frauds.
Types of Fraud Prevalent Today
Any unauthorized transaction an account holder didn’t make or approve is a nuisance to both banks and consumers. Lost cards, stolen cards, counterfeit cards, card ID theft, card non-receipt, ID document forgery, identity theft, fake identification, email phishing, and imposter scams – are some of the most common types of payment fraud that can extract valuable information from unsuspecting individuals. With an email, message, phone call, and other forms of communication commonly known as phishing, users are often tricked into revealing information or downloading malware onto their devices. Such activities can be avoided by authentication protection methods like email verification, whitelisting, blacklisting, pattern matching, etc. This assures safety control by implementing client-level verification – a tight-knit security protocol that requires the completion of submission from both the receiver and the sender.
AI in Fraud Prevention and Compliance
Through AI, organizations can save considerable effort and time on tracking, monitoring, detecting, and working on fraud prevention and detection.
Managing regulatory compliance
Enterprises experience large volumes of false positives generated by their conventional rule-based compliance alert systems. AI reduces the hassle of managing tasks manually by emulating human intelligence to perform semantic searches, correlating regulatory requirements across legislation and standards, classifying rules for easy consumption, identifying opportunities, and harmonizing policies and controls. AI can improve the efficiency of compliance operations and reduce costs in today’s data-driven environment by autonomously categorizing compliance-related activities and alerting them to important updates, events, and activities.
Know your customers (KYC)
AI gets more intelligent with time. It can read and process a large amount of data and, over time, learn from it. AI-backed KYC measures can help banks and other financial institutions strike the right balance between customer security and convenience by automating the verification process of hefty documents such as verifying IDs, matching fingerprints, and even performing facial recognition almost instantaneously. Thus, reducing the chances of fraud.
Addressing human errors
Human errors cost industries a loss of billions every year. An enterprise requires employees to manage a huge volume of tasks; hence creating confusion and making way for errors. AI, on the other hand, can read into the anomalies more speedily. Since AI has the capability to learn from data online, it can shed light on blind spots and detect reasonable errors in the process at an initial stage.
Identifying trends and suspicious patterns
Intelligent AI agents can now filter data from various unstructured document types, like PDFs and images, and turn it into a structured format – making it easier to manage and extract valuable insights. These AI agents can use human intelligence to identify suspicious activities like a massive purchase or an unusual influx of funds in an account, thus helping the experts detect malicious behavior along with reducing security risks and data breaches.
Benefits of Using AI for Fraud Prevention
As we know, enterprises have always struggled with fraud prevention, more so with the boom in digital transactions. Today, AI acts as a tool to improve an organization’s network security, reducing operational risk and preventing fraud by early detection of suspicious activities.
Reduced operational risks and expenses
Traditional fraud detection is cumbersome and ineffective in a digital environment. Be it in the banking sector, retail, finance, or marketing, there is always a large volume of data that needs protection. While it can get overwhelming to manage everything manually, AI technologies enable real-time monitoring and processing of data. AI makes it easier to classify, store and visualize data, and flag outliers and data anomalies for immediate effect – ultimately resulting in the speeding up of fraud detection and preventive measures.
Better customer service and support
With machine learning and NLP processes, AI can now interact with customers at human parity levels. Most AI-powered intelligent and cognitive agents provide customers with more than just first-level engagement. Cognitive AI agents can interact with a bulk of customers and provide real-time support, as well as capture instant customer feedback. With predictive analysis and data-led recommendations based on a customer’s history that covers details of their transactions with the enterprises, AI can detect fraudulent transactions at the very onset and trigger the prevention process at the earliest, saving the enterprise from monetary and reputational damages.
A centralized account payable process and efficient payment control
Much of the digital vulnerability that organizations face is due to a decentralized accounts payable process that limits the visibility of who is getting paid for what, thus paving a path for fraud schemes to thrive. Automating the accounts payable processes enables efficient transfer of invoices through a centralized online method, giving the accounts team complete visibility into every payment at each step. This allows them to identify any suspicious payment methods and go through all the necessary verifications before any fraudulent payments are released.
Conclusion
While fraud prevention techniques demand changes in how data is stored, organized, and used – the first step is implementing artificial intelligence. With constant technological development, the threat of fraudulent activities is likely to rise, making AI a necessity to fight against fraud, provide enhanced customer experience to clients and customers, and boost loyalty. With the ability to reduce the human workload drastically and provide quick solutions against fraudulent activities – AI is, indeed, the future for enterprises.
Make Your Enterprise Intelligent with E42
A no-code platform to create intelligent AI workers, E42 helps enterprises bring automation to processes across functions. From enhanced customer experience to the generation of insights and analytics for finance and marketing, E42 AI workers eliminate human intervention in tasks such as completing payments, controlling expenses, processing, verifying, and reconciling invoices, and several other business processes.
To kickstart your enterprise automation journey, write to us at interact@e42.ai!
