<div></div> <article id="post-2711692" class="border-top clearfix article-wrapper post-2711692 post type-post status-publish format-standard has-post-thumbnail category-ai category-big-data category-cloud category-commerce category-dev category-enterprise category-security category-business tag-ai tag-artificial-intelligence tag-banks tag-category-business-industrial tag-category-computers-electronics-enterprise-technology tag-credit-cards tag-financial tag-fintech tag-forrester tag-fraud tag-fraud-detection tag-machine-learning tag-research tag-study vb_post_designations-homepage has-thumbnail"> <aside id="" class="MainBlock__sidebar"> <div class="vb_widget widget sidebar-widget-featured-event"> <h2 class="widgettitle">Data-driven creative for sensitive verticals</h2> <p class="sidebar-widget-featured-event-description">With big privacy changes, creative has become even more important with verticals like health and wellness and finance. Learn how to make data the backbone of your campaigns. </p> <p> <a href="https://www.brighttalk.com/webcast/12339/491779?utm_source=vb&utm_medium=jul-29-sidebar&utm_content=text-link&utm_campaign=aug-19-yellowhead-webinar" rel="noopener" target="_blank" class="sidebar-widget-featured-event-cta">Register for free now</a> </div> <div id="browsi_left_margin"></div> </aside> <p><!-- #secondary .widget-area --></p> <div class="article-content"> <div id="boilerplate_2682874" class="post-boilerplate boilerplate-before"> <p><em>All the sessions from Transform 2021 are available on-demand now. <a href="https://venturebeat.com/event/transform-2021/on-demand/#primary" data-type="URL" data-id="https://venturebeat.com/event/transform-2021/on-demand/#primary">Watch now.</a></em></p> <hr class="wp-block-separator is-style-wide"> </div> <p>AI tools have become part and parcel of fraud management solutions in the enterprise, according to a new Forrester report. In it, analysts at the firm identify key fraud management use cases where AI can help, mapping how brands can deploy AI technologies in each scenario.</p> <p>Fraud is on the rise worldwide, and it’s impacting enterprises’ bottom lines. According to a PricewaterhouseCoopers <a href="https://www.pwc.com/gx/en/services/forensics/economic-crime-survey.html">survey</a>, 47% of businesses experienced a fraud in 2019 and 2020, which cost a collective $42 billion. Some studies show that the pandemic is playing an increasing role. In a <a href="https://www.prnewswire.com/news-releases/survey-increase-in-payments-fraud-activity-attributed-to-the-pandemic-according-to-65-of-financial-professionals-301260380.html">report</a> commissioned by J.P. Morgan, nearly two-thirds of treasury and finance professionals blamed the pandemic or the uptick in payments fraud at their companies.</p> <div id="ac-lre-player-ph"> <div id="ac-lre-player"></div> </div> <p>The Forrester report outlines AI’s unique strengths in combating fraud, including its ability to boost monitoring accuracy, augment human intelligence, and bring biometrics into the mainstream. Feeding rich datasets into fraud detection AI models can help spot fraud that rules-based systems overlook, Forrester notes, while those same models can be used by security teams to prioritize which alerts to investigate. Meanwhile, emerging AI-based solutions like biometric verification enable app authentication in near real time.</p> <p>The report stresses, however, that organizations need to have the right technical pieces in place to reap the benefits of fraud-detecting AI. For example, prediction models and risk scoring systems must be low-latency to cope with large transaction volumes. Beyond this, data scientists must build training, test, and validation datasets, which can be challenging. According to Forrester, many banks report that their training data is miscategorized and suffers from quality issues like missing fields or inconsistent spellings of people and organizations. And in Asia, banks are reluctant to provide training data to consulting firms — and sometimes even to employees.</p> <p>Indeed, other reports show that data issues plague companies of all sizes on their AI journeys. In an Atlation <a href="https://venturebeat.com/2021/03/24/employees-attribute-ai-project-failure-to-poor-data-quality/">survey</a>, a clear majority of employees (87%) pegged data quality issues as the reason their organizations failed to successfully implement AI and machine learning. McKinsey similarly estimates that companies may be squandering as much as 70% of their data-cleansing efforts.</p> <h2>Overcoming challenges</h2> <p>Organizations must also ensure that models evolve over time and give reasons to explain why certain transactions are deemed fraudulent, Forrester says. They also need iterative, closed-loop workflows to train models and integrate them with data sources like blacklists, whitelists, device IDs and reputations, and know-your-customer lists.</p> <p>The report recommends that companies use a combination of on-premises and cloud-based implementation options for their AI fraud detection use cases. While on-premises solutions offer convenience, the <a href="https://venturebeat.com/2021/07/30/ai-weekly-ai-adoption-is-driving-cloud-growth/">cloud</a> has the potential to improve training and inferencing performance, Forrester notes, lowering costs and in some cases providing enhanced protection.</p> <p>“As more fraud management vendors offer cloud-based solutions, it makes sense not to invest solely in static on-premises hardware and software, but to augment their on premises assets with elastic computational resources in infrastructure-as-a-service or software-as-a-service solutions,” coauthors and analysts Andras Cser, Danny Mu, and Meng Liu wrote.</p> <p>Once barriers to the adoption of fraud-fighting AI are overcome, the advantages can be enormous. Visa prevents $25 billion in annual fraud thanks to the AI it developed, SVP and global head of data Melissa McSherry <a href="https://venturebeat.com/2020/07/15/how-visa-harnessed-data-and-ai-to-prevent-25-billion-in-fraud/">revealed</a> at VentureBeat’s Transform 2021 conference. And at a higher level, aggregate potential cost savings for banks from AI applications has been estimated at $447 billion by 2023.</p> <div id="boilerplate_2660155" class="post-boilerplate boilerplate-after"> <h3>VentureBeat</h3> <p>VentureBeat’s mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact.</p> <p>Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:</p> <ul> <li><span style="font-weight: 400">up-to-date information on the subjects of interest to you</span></li> <li style="font-weight: 400"><span style="font-weight: 400">our newsletters</span></li> <li style="font-weight: 400"><span style="font-weight: 400">gated thought-leader content and discounted access to our prized events, such as <a href="https://events.venturebeat.com/transform2021/"><strong>Transform 2021</strong>: Learn More</a></span></li> <li style="font-weight: 400"><span style="font-weight: 400">networking features, and more</span></li> </ul> <p><a class="membership-link" href="https://venturebeat.com/venturebeat-membership-plans/">Become a member</a> </div> <p><!-- Boilerplate CSS for "after" --></p> <style type="text/css">.article-content .boilerplate-after { background-color: #F5F8FF; padding: 30px; border-left: 4px solid #000E31; line-height: 2em; margin-top: 20px; margin-bottom: 20px; }</p> <p>.article-content .membership-link { background-color: #000E31; color: white; padding: 10px 30px; font-family: Roboto, sans-serif; text-decoration: none; font-weight: 700; font-size: 18px; display: inline-block; }</p> <p>.article-content .membership-link:hover { color: white; background-color: #0B1A42; }</p> <p>.article-content .boilerplate-after h3 { margin-top: 0; font-weight: 700; }</p> <p>.article-content .boilerplate-after ul li { margin-bottom: 10px; }</p> <p>@media (max-width: 500px) { .article-content .boilerplate-after { padding: 20px; } }</style> </p></div> <p><!-- .article-content --></p> </article> <p><!-- #post-2711692 .article-wrapper --></p> <div id="masonry" class="jobbioapp"></div> <p>The post <a rel="nofollow" href="https://patabook.com/technology/2021/08/06/forrester-adopting-fraud-fighting-ai-requires-the-right-technical-framework/">Forrester: Adopting fraud-fighting AI requires the right technical framework</a> appeared first on <a rel="nofollow" href="https://patabook.com/technology">Patabook Technology</a>.</p>
source https://patabook.com/blogs/105206/Forrester-Adopting-fraud-fighting-AI-requires-the-right-technical-framework
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