Card Fraud Detection and Its Importance to Your Enterprise

Securing your company’s confidential financial data is paramount to its success. And a potential breach that subverts the security protocols implemented by your management could not only cause economic damage but even destroy the reputation your brand has enjoyed in the eyes of your target audience. High-quality card fraud detection solutions may be necessary to keep your profitability predictable. And the expertise of a firm specializing in AI payment fraud detection and prevention could help your company advance to a superior level.

Card fraud detection solutions can protect the confidential financial data of your customers and could be a tool to prevent unauthorized access to your bookkeeping records. Fraudsters will always try to exploit vulnerabilities, and their attempts are getting bolder each year. Has your company reached a heightened status and now works with national or international partners? In this case, verifying your clients’ financial data can no longer be done manually. And that’s a problem. By collaborating with a specialized agency, payment fraud detection could become a triviality, the utilized tools providing you in less than a second the necessary data to approve a transaction.

Professional payment fraud detection services could safeguard the confidence your target audience places in your brand, help you identify orchestrated attacks against your internal systems, reduce the workload of your employees, increase the profitability of your services, and detect any breach in your security protocols. Card fraud detection systems use thousands of parameters to determine the veracity of outstanding transactions and can be adaptable to your market growth potential and industry changes.

It’s a Constant Effort

Financial fraud is a global problem that affects both small companies operating in emerging economies and international conglomerates operating in the most active markets on the planet. What are the principal reasons for fraud escalation? The access of bad actors to more sophisticated scam methods. Globalization across all industries, the increasing interconnectivity between people, and the AI revolution all mean that fraud attempted by malicious individuals can now be carried out on an industrial scale. And even if only 0.1% of these attempts are successful, with such high margins, their profits will be substantial

Fraud methods are in a continuous process of evolution. And businesses find themselves in a cat-and-mouse chase to secure customers’ data. Any small mistake can be catastrophic for your finances. And for this reason, automating your company’s internal processes with the help of fraud prevention specialists could be essential. Payment fraud detection systems are constantly evolving, driven by the AI advantage of neural networks. And when combined with your databases, tools like these could verify the transactions of over 99.9% of users.

What Happens in a Card Check?

Let’s say, for example, that you own an online shop, and a customer wants to make a transaction. In less than a second, a professional card fraud detection tool could perform a complex set of analyses to determine whether the identity and intentions behind the transaction are genuine. But how does it work? In a nutshell, the used AI program will collect data from the debit or credit card holder, check the transaction sum against the person’s past activity, note the location and the IP address of the individual, and then perform a real-time system evaluation in which all these elements contribute to a comprehensive risk score.

The fraud detection software will perform a detailed behavioral analysis of the user behind the transaction, flag potential inconsistencies, and detect anomalies, such as whether the recipient has conducted multiple high-risk transactions in a short period. If the risk score is high, the customer may be asked to verify his identity by other methods, such as self-authenticating using an OTP sent directly to his mobile phone. The transaction could also be declined if certain risk thresholds implemented by your firm’s management are exceeded. However, most of the time, everything checks out, and the transaction can proceed, with the verification process taking only a few milliseconds.

How Can AI Help?

56% of US businesses were affected by payment fraud in 2022. And the reason for this percentage is that most enterprises in our country do not use comprehensive payment fraud detection AI tools. Such a program could utilize logged data and information gathered with the help of neural networks to detect anomalies or behavioral deviations in transactions. And with these resources, it could block fraud attempts before they have a chance to test your staff’s vigilance. AI tools get only better with time, can recognize patterns in fraud methods more efficiently than any human operator could, can eliminate synthetic identities used by fraudsters with over 95% confidence, and can create automated and highly-customizable profiles of your customers.

AI can eliminate false alarms that reduce the efficiency of your departments, enhance the security processes your company implements, and drive a 66% reduction in the time needed to investigate unsuccessful fraud attempts. The use of neural networks has a 96% efficiency in detecting fraud attacks, representing an increase in accuracy of over 30% compared to traditional methods. AI is the future, both in terms of cybersecurity and risks to companies’ confidential financial data. And to stay one step ahead of shady individuals, you must invest in efficient fraud detection AI tools.

It’s a Reality of Our Century

Unfortunately, we live in a time when online fraud is at an all-time high. Technological progress, decreasing prices of powerful hardware, and the growing number of companies emerging each year in global markets have all led to the development of international gangs specializing in business fraud. And for your company not to fall prey to them, you will have to invest in professional card fraud detection tools. These tools could use AI to analyze your collected data and successfully respond to the cybersecurity difficulties faced by most firms operating on a national or international level.

With the help of a rule-based check system and through real-time analysis of the transactional information, the company you collaborate with should tell in less than a second if the identity behind the transaction is real and if the financial data recorded is legitimate.  Thanks to AI, payment fraud detection tools are more advanced than ever, providing everything from chargeback protection for merchants to account takeover solutions, call center fraud prevention, or payment scam avoidance. AI tools could improve the efficiency of your KYC/AML program and flag customers engaged in prohibited activities, like money laundering.

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