Ever since its emergence, artificial intelligence (AI) has sparked debate and discussion amongst many. However, one of its by-products could potentially become the top fraud prevention solutions from now on.
Fraud has been a constant problem in every type of business, and fraudsters always find a way to bypass its prevention. As a result, businesses constantly seek even better protection against such malicious threats.
To protect businesses, implementing stronger authentication is mandatory, and AI might potentially help them. How can AI authentication become a solid prevention against fraud? Let’s delve into the matter in a second.
What is Fraud Prevention?
Fraud prevention in business refers to any activities or technologies implemented to prevent fraudulent acts. These acts can harm businesses and customers by exploiting vulnerabilities in the protection system.
In order to prevent fraudulent activities, it takes a lengthy procedure to match any suspicious activity with the data points. If there is an abnormality or mismatch, fraud prevention tools will take care of the issues.
Many companies—like banks, financial services, and even e-commerce entities—rely on these tools to combat fraud. This is because these services are most likely being a primary target for hackers and fraudulent acts.
Fraud prevention for business usually goes along with fraud detection. Together, they can fight back against frauds, ensuring the businesses and customers have a secure environment for digital activities.
Why is Fraud Prevention so Important?
The importance of having some sort of prevention system for fraud exists for many reasons. Here are a few fraud prevention tips and reasons why any businesses should implement fraud prevention and detection as well:
- Prevent financial losses for both businesses and customers. Fraudsters can take over accounts from companies with a lack of prevention, stealing valuable information and money for their own profit.
- Secure customer data from unwanted access. Lack of prevention against fraud may give customers a vulnerability for hackers and fraudsters, putting their safety at huge risk.
- Increase customer satisfaction and build their trust with businesses. Satisfied customers who entrust the business will potentially become loyal customers, which can help spread good words about the business to others.
- Help companies follow regulations about maintaining data protection. Having a secure prevention against fraud can help companies to follow GDPR (General Data Protection Regulation) with ease.
How AI Authentication Works as Fraud Prevention Solutions?
All these talks about preventing fraud will lead to the next question: What are the best solutions available? The best way of preventing fraudulent activities is by adding more sophisticated technology to authentication.
Artificial intelligence, for example, has all companies need for a robust authentication system. It can learn complex data patterns, has machine learning (ML) abilities, and can learn to adapt with future fraudulent methods.
On top of that, AI can also ease the authentication procedure by utilizing a passwordless system. This can help customers to ease the login process while at the same time, protect them better against fraud.
Key Benefits of AI Authentication for Fraud Prevention Solutions
There are several key benefits of using fraud prevention AI as a solution to better and more secure business. These benefits come from the good use of artificial intelligence.
Advanced Fraud Detection
AI can upgrade traditional fraud detection systems to be more advanced, thanks to its machine learning capabilities. Unlike traditional pattern-based systems, advanced fraud detection is generally a better detector because:
- AI can process an even wider amount of data to analyze and find abnormalities in real time. This can help companies to have earlier detection for irregular activities, before their negative impact occurs.
- AI can use historic and real-time data to make better predictions for potential fraud. It can give faster alerts for potential fraudulent activities, allowing companies to make quicker decisions.
- AI has an ability called fraud orchestration, allowing it to control multiple detection tools. As a result, AI can streamline the process of detecting frauds, allowing it to take accurate methods.
Behavioral Biometrics
Biometrics is known to be one of the methods of authentication. However, AI has its own way to add biometrics to the more secure authentication, using user behavior as a unique customer profile.
Normally, every user has its own usual interaction with the business. With this behavioral biometrics feature, AI can detect potentially suspicious activities in users by comparing them to their historic activities.
Reduction in Account Takeover
Account takeover is the last thing customers want in their experience with any businesses. Especially for banking accounts that possess vast amounts of balance, which could be a big target for fraudsters.
By allowing AI powered threat detection, companies could minimize the chance of account takeover with its behavioral biometrics system. AI can also reduce it even more with several authentication methods.
Personalized Fraud Risk Assessment
Every danger has its own risk level, even in fraudulent activities. To ensure the companies can see which one has more risk than the others, AI can help with its risk-based assessment in authentication.
For example, if one user wants to login just for checking their accounts, then AI will deem the risk as low. However, if one user wants to transfer a balance from their bank account, the risk will be deemed as high.
Any high-risk activities will get more authentication processes to ensure if it’s done by a legitimate user, rather than fraudsters. This assessment can also be based on the user’s login time and type of application being used.
Faster Fraud Response
Lastly, real-time-based fraud prevention artificial intelligence will have faster fraud responses than traditional fraud prevention. As a result, companies can detect and prevent more fraud attempts in their business.
Choosing the Right AI Authentication as Fraud Prevention Solutions
AI is a good authentication and fraud detection system, but it doesn’t mean companies can just get it immediately. There are still a lot of key factors to decide which one suits businesses the best, such as:
- Scalability that the AI possesses, especially for a business with an ever-changing landscape. AI should be adaptive and follow business growth and needs, not the other way around.
- Level of security AI has to handle and manage customers data and accounts, ensuring it doesn’t compromise their data privacy.
- User experience that AI can give to customers, such as frictionless authentication. This is to make sure AI key benefits above don’t give too much friction to their login process.
At the bottom line, AI can be a perfect fraud prevention solutions moving forward. For that, companies can rely on the best AI solutions—such as Keypaz—to truly have an impenetrable shield in their businesses.