Machine learning and fraud detection
Machine learning might sound like something out of a science-fiction novel, but it’s actually a very real – and very important – aspect of modern fraud detection. If you’re concerned about fraudulent transactions dogging your organization, rest assured that machine learning can help you sidestep this threat – here’s how.
The problem of fraudulent transactions
Thankfully, the days when an unscrupulous individual could simply forge a credit card or re-program a magnetic strip have passed. But even with strong credit-card chip technology, fraud can still occur. In fact, McAfee estimates that fraud costs the business world the equivalent of 0.8 percent of the global GDP.
Part of the problem involves the sheer number of transactions occurring all over the world at a lightning pace. This avalanche of transactions makes monitoring and intervention a major challenge — at least for humans.
Machine learning to the rescue
The good news is that machine learning can make fraud detection a speedier process than ever before. Our partner Kount has spent more than a decade developing sophisticated systems that use machine learning algorithms. These algorithms can recognize and flag potentially fraudulent transactions faster than any human could, which goes a long way in the fight against fraud.
Two kinds of machine learning complement each other in Kount’s system. A technology called Boost provides supervised machine learning by running data through hundreds of transactional models. This provides valuable historical context that helps determine the transaction’s legitimacy. Meanwhile, Persona technology examines real-time transactions through unsupervised machine learning for current environmental insights into each transaction. The transactions will then get flagged or automatically declined, depending on the weight of evidence against their legitimacy.
What’s the bottom line for organizations like yours? Bear in mind that even a tiny percentage of undetected fraud can add up to thousands in chargebacks. The extra speed and accuracy of machine learning can make a major difference in your financial efficiency. You’ll save your organization a lot of time, money, and frustration.
Are you ready to put cutting-edge technology to work on slashing your transaction fraud levels? Contact our team today to learn more about the many advantages of machine learning!