What is fraud detection?
Fraud detection is a set of processes that are put in place by an organization to identify and prevent fraudulent activity such as identity theft, unauthorized transactions, money laundering and more.
Advances in technology have made fraud detection and prevention more efficient and effective. Companies in industries such as financial services and healthcare are pairing big data with artificial intelligence (AI) to build customer profiles, analyze transactions in real-time and implement risk scoring to help combat fraud.
Benefits of fraud detection
As more and more services become available online, customers are expecting brands to provide environments where transactions can be completed in a safe and secure manner. Having a robust fraud detection strategy in place provides the following benefits:
- Improves customer experience: A successful fraud detection solution can create a secure experience that reduces false positives/negatives while simultaneously maintaining a streamlined customer journey.
- Enhances consumer trust: An effective fraud detection strategy can help build trust with customers and maintain brand reputation.
- Reduces losses: Fraud losses directly impact a brand’s bottom line. Fraud detection strategies that utilize AI can detect fraud in real-time, before it hits the books.
- Fraud prevention: The data and experience gained through fraud detection practices can help organizations build fraud prevention strategies that can stop fraud before it occurs.