PYMNTS MonitorEdge May 2024

Informed.IQ and Fuse Team on AI-Powered Fraud Prevention

Informed.IQ

Artificial intelligence verification software firm Informed.IQ teamed with loan origination system (LOS) Fuse.

Via the partnership, the companies launched a solution that offers streamlined verifications and fraud detection for financial institutions, according to a Tuesday (June 4) press release.

“Fuse enables banks and credit unions to build custom workflows and integrations with their next-gen loan origination software,” the companies said in the release. “The new workflow allows users of the Fuse system to take advantage of Informed’s AI-powered verification suite to reduce operating expenses, detect income fraud, shorten loan processing times, and allow lenders to access that information in a single location in the LOS.”

Fuse’s customer base across the consumer, commercial, and auto lending sectors will extend Informed’s technology across multiple lending verticals, per the release.

The partnership comes as financial institutions are facing increased threats from fraudsters, some of which are using AI to carry out their goals.

“The industry in fraud is shifting to real-time learnings because the fraudsters are now real-time,” Shimon Steinmetz, chief financial officer at risk assessment and fraud prevention solution Vesta, told PYMNTS in August. “In cyberspace, you have something called a zero-day attack, which basically means you’re going to get attacked on day zero, and you’re going to be attacked before you even know what the solution is because the criminals are way ahead of you.”

Meanwhile, the PYMNTS Intelligence report “Financial Institutions Revamping Technologies to Fight Financial Crimes” found that 70% of financial institutions use AI and machine learning (ML) to fend off fraudsters.

That’s up from the 66% of bank executives who said they were using the technology in 2023, which itself was a leap from the 34% who said the same the year before.

“But developing AI and ML tools can be costly, which explains why only 14% of FIs say they build their own fraud-fighting AI and ML technologies,” PYMNTS wrote. “Nearly 30% say they rely entirely on third-party vendors to provide these tools. Similarly, just 11% of FIs develop their own APIs in-house, while 22% rely entirely on third-party API solutions.”

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