Artificial Intelligence (AI) and machine learning (ML) are advanced technologies that are used by the payments industry to detect fraud attacks. However, with rapidly evolving technology, there may soon be another major advancement entering the payments industry: Generative AI.
According to Finextra, Generative AI may be a game changer in fraud prevention, having been touted by MIT as one of the most favorable advances in AI technology in the last 10 years. Generative AI is considered a sub-field in machine learning that creates new data or content that is derived from a given set of input data.
It’s still early days, but according to Oliver Tearle, head of technology innovation at The ai Corporation, this new technology will “offer a myriad of solutions to complex fraud detection, data mining, and solution development challenges.”
AI and ML models have evolved over the years to help decrease fraud, while at the same time, increase revenue. And as with any new technology—and even existing tech that is being used frequently today—there is a learning curve. That said, there’s no doubt that this can help merchants, acquiring banks, and payment service providers (PSPs) who are currently facing a lot of pressure to reduce the acceleration of transaction fraud that they’re seeing.
And while it’s important that the latest fraud technology is used to outpace fraudsters, it’s also important to ensure that the data that’s been collected to help protect consumers in real-time environments isn’t of poor-quality data. Large amounts of data are necessary to help fight fraud effectively, but in order for the end solution to be fully effective, the data needs to be standardized.
By and large, emerging technology has done a lot for fraud prevention. And Generative AI technology may be a powerful tool that many banks, financial institutions, and merchants can leverage to enhance fraud mitigation performance.