Artificial Intelligence: Do Investments into the Latest Crusaders against Cybercrime Pay off?
Cybercrime is on the rise, and the rapid digitization will drastically drive up cost of data breaches. Firms are looking for new software and systems to protect them. The “cyber crusader” companies that are creating these solutions are some of the brightest new stars in the AI firmament.
The fight against cyber criminals is never ending – and it is becoming big business. Cybercrime is already estimated to cost businesses up to USD 400 bn every year,1 while recent research predicts that the rapid digitization of every aspect of consumers’ lives will drive up the cost of data breaches to USD 2.1 tn globally by 2019, more than four times the amount in 2015.
Artificial intelligence (AI) and other technologies are increasingly being used to combat this threat, as passwords and other memorable information are being phased out due to fears that they are vulnerable to fraudsters.
Using AI to Fight Financial Fraud
Financial firms are using AI to identify tiny anomalies in activities and behavior that could indicate fraud. For example, one large UK bank is introducing technology that can detect differences between the way a genuine customer habitually interacts with the system and the way a fraudster might do so.
Some companies are moving toward voice-recognition systems to replace passwords for customers, using natural language processing (NLP), which can identify whether a customer calling a bank is the person they claim to be. For example, technology at one telephone bank measures around 140 different aspects of a customer’s voice, including accent and speed as well as how they use their lips and vocal tracts.2
Dr. Georgios Samakovitis of the University of Greenwich, who is an expert in banking and anti-money laundering technologies, points out that AI has had a close relationship with the world of finance since the 1980s. Now, however, it is increasingly being used to fight fraud. "Only a few years ago, this area was underserved and barely in the spotlight, but now we are seeing far more activity than ever", he says. "The big players in finance are developing in-house capability, but many out-of-the-box solutions are now available, and smaller financial institutions outsource this".
Over the next few years, we will see more collaborative AI models among banks, especially in areas such as know your customer (KYC) and fraud intelligence sharing.
Dr. Georgios Samakovitis, University of Greenwich
Sophisticated Technology to Fight Sophisticated Fraudsters
As voice recognition increasingly becomes the interface for the Internet of Things, voice-enabled devices are creating new opportunities for identity theft and fraud. Technology to combat this will become increasingly important. For instance, one company has devised technology that can identify, locate and authenticate phone devices from the audio element alone to detect fraudulent calls.3
Big data and machine learning also help in the fight against fraud. AI can “learn” about typical types of fraud by analyzing hundreds of thousands of cases, detecting patterns that enable it to flag up possible fraud cases for investigation.4 Machine learning, behavior analysis and big data can also be used to analyze consumer behavior when navigating websites and confirm the legitimacy of transactions.5
As malware and other technology powering online fraud becomes increasingly sophisticated, firms and their customers are looking for new software and systems to protect them. There is huge demand for advanced technological solutions to the growing problem of internet fraud and identity theft. The “cyber crusader” companies that are creating these solutions are some of the brightest new stars in the AI firmament.