Fraud detection

At a New York Fintech Week event, speakers urged fintechs to better understand the criminal mindset and to use artificial intelligence to detect and thwart fraud.

A survey by American Banker indicates that check fraud is the top fraud concern for banks, especially smaller ones. This is driving spending to prevent it.

The Knoble, a nonprofit that brings banks, credit unions, payment networks and law enforcement together to detect elder and child exploitation and human trafficking, has worked with more than 600 banks.

California has a pending law that would hold banks liable for three times the amount of a loss if they had reason to suspect financial exploitation of an older customer and did nothing about it.

Machine learning has a firm place in banks' fraud and scam detection work. But some are also experimenting with using generative AI to research and handle claims.

Specialized large language models should be harnessed to help financial institutions identify and halt fraudulent activity. The best model would involve regulator-approved pooling of anonymized customer data.

Companies lose an estimated 5% of their revenue each year due to fraud, according to a report from the Association of Certified Fraud Examiners.