Fraud Doesn’t Wait for Anyone
The past 18 months have brought new and interesting challenges when it comes to cybercrime and fraud threats. Schemes are evolving in unexpected ways for merchants who accept digital payments. Because of the fast pace of change, the payments industry is developing artificial intelligence (AI) to help make more accurate decisions when it comes to approving transactions and discovering fraudulent ones.
One of the major vulnerabilities is that fraud detection systems are relying on slower, out-of-date detection systems that fraud attempts are able to bypass.
AI is ideal as it goes beyond set, linear rules and uncovers patterns and abnormalities that can scale risk. Companies that have started to use this technology have seen improvement in sales and revenue by enabling them to accept legitimate orders and mitigate the risk of fraud loss by reducing chargebacks and cutting down on manual work.
In addition to using AI to reduce loss, it also provides valuable data about target markets that can help companies prospect desirable clients. Over time they can uncover trends that help manage their operations better. For example, companies may discover there is seasonality to fraud attempts or a certain geography that is less or more susceptible to cybercrime. Companies can also use data to build digital profiles for clients and recognize repeat offenders, as well as good customers.
Get on board
As vulnerabilities multiply for consumers and businesses, regulations will only continue to increase. Resistant organizations may not realize saving time or money to avoid implementing fraud protection technology may cost them more in the long-run. By the time they are willing to adapt, they may be miles behind. In short, it’s becoming less of an option to innovate.
Consumer protection has escalated over the past several years. For example, major credit card companies are increasing protection for customers through more transparency in their application processes and simplifying language in their agreements. Consumer protection organizations are focused more on trust and perception to help the customer be more empowered, avoid getting taken advantage of, while using technology to make these changes.
The Wayfair Act was enacted in the U.S. in 2020, which allows states to impose local taxes on businesses that operate within their borders, even if they aren’t located there. Tax law is becoming more complex, and the manual processes used by CFOs, bankers, accountants are no longer efficient. These professionals are increasingly using AI software and technology to help with their payment, tax and legal issues in order to stay compliant.
The future is bright
Despite the uptick in fraud schemes, fraud-risk mitigation is entering an exciting era. AI offers enhanced ways to stop crime in its tracks and stay ahead of offenders looking to steal data or disrupt payment systems. With strategic adaptation and the right partners, businesses can be more confident in moving forward and operating in this changing environment.
Technology investment can be expensive, and doesn’t always make sense for a company to invest on its own. The best they can do is make sure to have fraud protection technology in place at a bank that stays current on trends and utilizes this technology for fraud protection tools, online banking, and payment methods. Call us today at 414-235-5262 to learn more.