How can AI Analytics Software Help Banks in Fraud Detection & Prevention?
What if I tell you that you needn’t worry about data breaches anymore at your bank? Sounds like a dream right? Then, wake up, it’s neither a dream nor a far-fetched future anymore, all of this is possible with AI Analytics Software for Banks.
There is no doubt over the fact that AI has revolutionized several industries with banking no exception to that. To increase the efficiency of its services, the banking industry has also been using AI-based latest technologies like payment processing software, and robotic process automation software. About 80% of bank leaders are looking forward to exploring the potential of AI in the banking sector. In fact, according to the report by McKinsey, AI offers the banking industry one of the significant opportunities for value generation with an additional $1 Trillion every year.
One of the major concerns of the customers while using AI banking is the threat of losing their money and personal data. Financial institutions are the biggest target of hackers since they can reap profits from such thefts. Moreover, as per the report by Statista, the average cost of these breaches is around $6.08 US Million in 2024. 10 of the biggest financial breaches to date have occurred in the US, UK, Australia and China.
What kind of data is at risk?
- Personal details like name, email, phone number, social security number, etc.
- Financial data like bank account number, credit/debit card details, transaction history, and account balance details.
- Login credentials like passwords, and PINs.
Are you at Risk?
The following are the different attacks that can take place at banks:
- Identity Theft
- Ransomware Attacks
- Phishing and Social Engineering
- Malware Infection
- Payment Fraud
- Malfunction or System Failure
But not to worry, AI Analytics Software for Banks is capable of detecting all these issues and making banks your trusted partners.
What is an AI Analytics Software?
It is the use of machine learning and artificial intelligence to make quick decisions. With the advanced algorithms, the software can analyze the data in real-time and help banks make more informed decisions, especially in terms of data protection and fraud prevention.
Also known as augmented analytics, it is an all-rounder software that gathers bundles of data in no time and helps in interpreting the data, deriving insights, and making predictions and recommendations based on that.
The traditional analytics was descriptive and diagnostic and only explained the reasons for why the attack happened but AI analytics software is one step ahead. By noticing the patterns using advanced natural language processing, and data visualization, it is more predictive and prescriptive and helps to forecast future outcomes and provide recommendations to optimize those outcomes.
Fraud Detection and Prevention with Analytics Software
Waiting for the bank to resolve your problem is like watching the paint dry….. That too on a rainy day. But not with AI. Since AI Analytics software automates the different operational functions of a bank, it has helped in resolving one of the major pain points of the customers which is the constant threat of losing their data.
The following are how AI analytics software and Gen-AI in banking can help in fraud identification and prevention:
1. Real-Time Transaction Monitoring
With advanced algorithms, AI can handle huge amounts of data in real time. It can identify the behavior patterns of every customer. AI has the potential to increase the fraud detection capacity of the bank by 60%. By processing the data, it notices any unusual activity like high-value transactions in a short span, unauthorized logins, or sudden large withdrawals and sends the alert for the same.
2. Better Accuracy
Traditional fraud detection methods were more reliant on Anti-Money Laundering (AML) transaction monitoring systems that led to false positives many times but with the help of AI, the accuracy of such detections has increased by 50%.
3. High Response Speed
Given the speed and the accuracy at which AI works, it sends real-time alerts in case of fraud to the customers before it’s too late and suggests necessary actions to prevent the issue.
4. Credit Frauds
AI can access the payment history, and transactions of any client, detect forgeries, identify fake signatures, manipulated figures, and falsified documents within seconds and hence, could protect banks from authorizing loans based on misrepresentation of data and prevent the risk of bad debts or other financial losses.
5. Phishing Frauds
AI helps in blocking phishing attempts in real time. It easily detects fake URLs, and spam emails by analyzing the subject line, and content and lets the customers beware of any potential frauds.
Hence, AI has the ability to detect the threat even before it’s a problem. It is a vigilant watchdog that is available and functioning all around the clock so that you can sleep peacefully knowing your data is safe.
Want to Learn More?: Stay Ahead of Fraud with NexGen Banking Summit
Dive deeper into the world of AI analytics software in banking with the NexGen Banking Summit and learn from the industry experts at the first-ever event on generative AI in banking. It’s a two-day event scheduled on 23rd and 24th October at the Hilton Hotel in London where you can learn about the latest technology in banking like AI analytics software for banks, Gen AI in banking, payment processing software, robotic process automation software, and many more.