Identity theft remains a major problem in our society. In fact, the rise of modern technology and the various improvements it has brought to the table have arguably made the situation even worse in this regard. Because today, thieves no longer need actual physical access to your data to do their worst. They can often cause a lot of damage by compromising your identity and working remotely, and they can often do most of that without engaging you directly at all.
That said, technology has also been used successfully to combat this problem, and we are seeing some major developments in this regard, especially from credit card companies and other players on the market. Artificial intelligence has been at the forefront of some of the most important recent happenings, and it’s a good idea to pay attention to that sector for anyone concerned about their own security. And of course, those operating in the field of finances in any professional capacity have an even bigger reason to pay attention to the way things work.
The Old Ways
Identity fraud detection used to be a largely manual process with little in the way of automation. Agents would get alerted when the system detected activities that didn’t match the user’s typical behavior, and they would then investigate, getting in touch with that user and alerting them that something was up.
But this process is slow and prone to errors, not to mention the fact that attackers understand how the system works and will often use various tricks to circumvent manual detection. With time, banks wised up to the fact that this needs to be handled in an automated manner as much as possible. Part of the problem lies in false positives, too “ it can be extremely annoying for a user to find themselves locked out due to their own legitimate activities.
AI has proven to be a great tool in assisting human operators to that end and helping them ensure that their job is done properly and according to all required specifications. Sometimes, it can even replace the work of a human operator entirely, but this is still something under active development.
Detecting Suspicious Activity Before It Becomes a Problem
Acting preemptively is something else that AI has enabled in the current situation, and a factor with a great potential for reducing fraud even further. Unfortunately, it takes significant resources to be able to do this reliably when you are working manually. This is something else AI has proved extremely helpful with, as it can reduce the error rate in preventative action significantly.
When done right, customers might not even realize that anything had happened with their accounts. While this obviously has some negative implications which should not be underestimated, it’s food that we have a choice in the situation.
Improving Accuracy Over Time
Most AI systems work on heavy data collection and analysis, and it’s important to pay attention to the information financial institutions are making available to their own analytical engines. Because with the right approach, the accuracy of the results provided can significantly improve over time. This can only happen when the system has access to enough data to learn from, however. It’s also important to ensure that the data is valid and fresh and to prune outdated data sets that might confuse the analytical engine.
How Users Are Helping, Too
One of the great things about the current situation is that users can assist the systems as well. This was practically impossible in the past, but it’s a very real situation right now thanks to the way AI systems learn and integrate new information. For the most part, users don’t even have to explicitly do anything to participate in this. The systems just learn from their behavioral patterns and build extra information with which they can work in the future. And the more people continue to use these systems, the better this will become.
New Tests and Methodologies
We have seen the rise of various new tests to check the legitimacy of transactions and general user activity too. Many of them rely on new developments in the AI sector, and it’s easier than ever to verify whether a transaction was actually intended by the user, or if something more is going on behind the scenes. And with that, we’ve seen the rise of entirely new methodologies designed to service the sector.
All of this is barely scratching the surface of what’s possible, too. A lot is coming up on the horizon, and we’re likely going to see some very interesting developments in the field of fraud detection and prevention thanks to AI tech. Hopefully, those working on these systems will be able to outpace hackers working against them, because it’s a cat and mouse game at the moment, and it’s not clear who is winning yet.
