Recent research from Technavio has indicated that the fraud detection and prevention market size is predicted to expand by £86.68 billion by 2028, a compound annual growth rate (CAGR) rate of 21.17 per cent*.
One of the most significant market trends is the increased implementation of artificial intelligence (AI). AI can identify abnormal consumer behaviour, such as account takeover and credit card fraud, helping organisations to stop false activity early – limiting the effects of fraud for both the consumer and the organisation.
Gareth Jones, director of business development at HGS, believes that AI is leading the way in helping businesses tackle fraud:
“Fraud undoubtedly poses a major security threat to organisations and consequently their consumers. This threat is constantly increasing, as technological advancements help present new avenues for cyber criminals to exploit vulnerabilities.
“Nevertheless, despite modern technology being part of the blame for this spike in fraudulent activity, it is also the solution. Artificial intelligence (AI) is leading the way for organisations to tackle this wave of financial crime and safeguard end-use enterprises against financial risks, becoming companies’ greatest weapon in their data protection arsenal.
“AI can rapidly analyse huge volumes of data to identify unusual patterns that would previously go unnoticed by manual investigation. It is also able to create predictive models that can forecast future spending for consumers. By doing this, the technology is capable of quickly identifying any unusual buying behaviour that occurs in the event a person’s credit card is stolen, and subsequently flagging these suspicious activities, mitigating any potential damage. What’s more, as fraudsters develop new methodologies and tactics, AI can learn from these patterns and update its detection algorithms, accordingly, enabling organisations to stay one step ahead of fraudsters.
“While AI seems to be the best answer to the 600-million-pound question of how to prevent fraud**, it is also imperative for organisations to proactively take responsibility to pacify this threat. This includes ensuring the right data management structures are implemented and that AI is carefully integrated to collaborate with existing systems. Businesses leaders can then confidently trust the flow of data going through their organisation, allowing for the accurate identification of fraudulent activity.
“The future of AI in this space is promising – in 2025 we are likely to see these tools integrated with other emerging technology, such as biometrics and blockchain. Biometrics will create an additional layer of authenticity, while blockchain will improve the traceability and security of transactions. As these technologies continue to evolve, we will see the capabilities of fraud detection transcend what we originally viewed as secure, creating a robust and effective line of defence against fraud.”
