The Industry Needs a New Approach to Fraud. Enter Artificial Intelligence.

The Industry Needs a New Approach to Fraud. Enter Artificial Intelligence.

We’ve seen many new fraud and authentication techniques and point solution providers enter the market over the past several years, but have we really made any improvement against fraud, particularly in the financial institution space? Apparently not.

Account opening fraud

Account opening fraud is a rapidly increasing challenge for issuers due to the plethora of identity data available to fraudsters. The 2018 Identity Fraud Study by Javelin Strategy & Research shows that the number of identity fraud victims increased by eight percent in 2017, with the amount stolen totaling US$ 16.8 billion (£13.4 billion).

Account takeover fraud

Account takeover, where a fraudster gains access to a victim’s account, typically leads to unauthorised fraudulent transactions. Account takeover fraud (ATO) is still trending upward, especially in the financial services sector. According to Javelin, existing account takeover fraud tripled in 2018 to 1.5 percent of all US-based consumers.

Key gaps in the fraud ecosystem

Some of the top financial institutions employ specific and often expensive point solution providers for device risk, behavioural risk, mobile phone intelligence, social reputation, email reputation, call centre fraud defence, bot and malware detection. And each of these providers typically provides a risk score or a rules-based approach, and a potentially long list of data attributes.

But this approach creates an issue and an opportunity. It isn’t necessarily a bad investment to add new point solution or data providers as long as you are getting value out of these investments. However, that is often the hardest determination to make. 

Learn how A.I., and more specifically true machine intelligence, can maximize the value of your existing data signals, reduce cost and minimize latency, while making more accurate risk and fraud decisions.  

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It’s Time the Telecommunications Industry Started Taking Fraud Seriously. It’s Time For Artificial Intelligence.

Written By Michael Lynch, Chief Strategy and Product Officer, Deep Labs

Service providers, consumers, and businesses are all impacted by telecom fraudsters. In fact, in 2017, the Communications Fraud Control Association (CFCA) estimated $29 billion is lost by carriers and organizations to global network fraud.

Telecom scammers and hackers are a constant threat to providers, whether it’s PBX hacking for revenue sharing fraud or call sharing fraud, or denial of service attacks, for example. They also target the consumers themselves, attempting to get access to their information for a variety of crimes. A popular scenario is when they pose as legitimate callers to banks to perform account takeovers, by leveraging techniques such as caller ID spoofing.

Whether it’s telecom, retail, or the financial verticals, fraudsters and hackers always seem to move much faster than those responsible for mitigating fraud. New, unforeseen threats need to be prevented rather than detected after the fact, which is the perfect use case for artificial intelligence, and more specifically true machine intelligence.

Organizations need new fraud prevention strategies based on artificial intelligence.

It will become more and more important to analyze data available from multiple channels, and only artificial intelligence will be able to provide the necessary key insights on behavior through billions of calculations, iterative insights, and process analytics.

 

Deep Labs featured in CBR: Payments industry warns of SCA “disaster” – Pleads for 18 month extension

Payments industry warns of SCA “disaster” – Pleads for 18 month extension

EPSM, a European payment services industry group, has called for a minimum 18-month delay to the introduction of Strong Customer Authentication (SCA) rules under PSD2 – just eight weeks ahead of a looming deadline for implementation.

In a desperate plea to regulators for an extension, the 67-member organisation, whose members provide a range of payment services to merchants, warned of “significant market disruptions” and “a disaster for consumers and PSPs [payment service providers]” without a grace period for industry to get its house in order.

“EPSM recommends that additional timeframes of 18 months for standard applications and up to 36 months for challenging applications, (e.g. in the travel and hospitality sector) across all regions should be agreed in a harmonised migration approach” the lobby group said, warning of business disruption risks without flexibility.

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