Sections
Fraud Prevention
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583VISAVisa Advanced Authorization Blocks $25 Billion In Fraud
Visa has rolled out internal data that indicates its artificial intelligence (AI)-based Advanced Authorization (VAA) security product has helped issuers prevent an...
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![If it seems like cases of fraud and hacking are always in the news, that’s because new incidents pop up practically every day. One of the latest involves hackers successfully accomplishing account takeovers (ATOs) of users of Zelle, the digital payment service. According to the new Digital Fraud Tracker, total losses due to fraud equaled $4.2 trillion in 2018, and fraudulent mobile app transactions increased 680 percent between 2015 and 2018. Fraud doesn’t impact all industries equally. According to the Digital Fraud Tracker, one-quarter of malware specifically targets FIs, and over 5 percent of online retail revenue is now lost to fraud. By 2020, it’s estimated that U.S. credit card losses will exceed $12 billion. More businesses are adopting artificial intelligence (AI) and other technology to fight fraud. According to the AI Innovation Playbook, 63.6 percent of FIs believe AI is an effective tool for stopping fraud before it happens, and 80 percent of fraud specialists using AI believe the technology could reduce payments fraud. Financial Institutions The rise of online banking has provided a host of opportunities for fraudsters. Old manual detection techniques like analyzing geolocations, IP addresses and discrepancies between billing and shipping addresses aren’t able to catch high-level attacks, and often result in false positives. BNY Mellon implemented an AI-based fraud detection initiative in 2018 to use pattern recognition and deep learning to analyze millions of transactions and identify those that are likely fraudulent. AI isn’t just used for fraud detection in the financial industry – it can also help with regulation compliance and adherence to anti-money laundering (AML) standards. Joseph Sieczkowski, head of technology architecture and data at BNY Mellon, explained how it isn’t enough to use AI reactively. Financial institutions also need to stay one step ahead of fraudsters, because they change techniques quickly and often. “[We] do testing constantly to retrain our models to be able to pick up on different types of fraudulent activities,” he said. Retail Balancing security with improving the customer experience is a challenge for all industries, though reducing friction is even more vital for luxury merchants. “Luxury retailers typically operate in a ‘high-touch’ environment, designed to be as friction-free for the customer as possible,” said Shamoun Siddiqui, chief information security officer of Neiman Marcus, in an interview with PYMNTS. “Any measure of security introduces friction. So, the challenge is to make security as transparent as possible while still protecting the customer’s personal information.” The luxury retailer has been using device fingerprinting to identify devices based on unique configurations – and, ultimately, to determine whether it’s being used by a human or is automated. “We are investing heavily in fraud detection systems that [use] machine learning and artificial intelligence to differentiate between normal patterns of customer behavior and potentially fraudulent ones,” Siddiqui said of the retailer’s approach to identity theft and other types of fraud. “These are patterns that would not be visible to the naked eye.” Fraudsters are getting more sophisticated, making use of bots to mimic typical online shopping behavior. After Neiman Marcus identified a bot attack, the hackers started including mouse movements to fool detection systems. Gaming Due to in-game purchasing becoming more standard – a recent study found that approximately half of all personal computer (PC) and console gamers spend money in-game, a share that climbs to more than 75 percent for mobile gamers – gaming platforms have become an attractive target for fraud, especially for hackers who acquire personal data via account takeovers. Gaming and gambling sites face similar issues, as too many security measures can turn off users who will go elsewhere. Some sites are reluctant to implement overly stringent security measures. Beyond using machine learning to detect fraud before it happens, gaming platforms are also using liveness detection, which requires players to be physically present during the verification process so they can submit photos, video playback or audio recordings to confirm their identities. Fingerprints, voice prints and other forms of biometric authentication are gaining steam in the arsenal of fraud-fighting tools. More than 63 percent of all smartphones manufactured in 2017 incorporated some type of biometric authentication, and a growing share of devices are expected to offer these solutions as fraud increases.](https://securecdn.pymnts.com/wp-content/uploads/2019/06/digital-fraud-ai-tools-450x270.jpg)
![If it seems like cases of fraud and hacking are always in the news, that’s because new incidents pop up practically every day. One of the latest involves hackers successfully accomplishing account takeovers (ATOs) of users of Zelle, the digital payment service. According to the new Digital Fraud Tracker, total losses due to fraud equaled $4.2 trillion in 2018, and fraudulent mobile app transactions increased 680 percent between 2015 and 2018. Fraud doesn’t impact all industries equally. According to the Digital Fraud Tracker, one-quarter of malware specifically targets FIs, and over 5 percent of online retail revenue is now lost to fraud. By 2020, it’s estimated that U.S. credit card losses will exceed $12 billion. More businesses are adopting artificial intelligence (AI) and other technology to fight fraud. According to the AI Innovation Playbook, 63.6 percent of FIs believe AI is an effective tool for stopping fraud before it happens, and 80 percent of fraud specialists using AI believe the technology could reduce payments fraud. Financial Institutions The rise of online banking has provided a host of opportunities for fraudsters. Old manual detection techniques like analyzing geolocations, IP addresses and discrepancies between billing and shipping addresses aren’t able to catch high-level attacks, and often result in false positives. BNY Mellon implemented an AI-based fraud detection initiative in 2018 to use pattern recognition and deep learning to analyze millions of transactions and identify those that are likely fraudulent. AI isn’t just used for fraud detection in the financial industry – it can also help with regulation compliance and adherence to anti-money laundering (AML) standards. Joseph Sieczkowski, head of technology architecture and data at BNY Mellon, explained how it isn’t enough to use AI reactively. Financial institutions also need to stay one step ahead of fraudsters, because they change techniques quickly and often. “[We] do testing constantly to retrain our models to be able to pick up on different types of fraudulent activities,” he said. Retail Balancing security with improving the customer experience is a challenge for all industries, though reducing friction is even more vital for luxury merchants. “Luxury retailers typically operate in a ‘high-touch’ environment, designed to be as friction-free for the customer as possible,” said Shamoun Siddiqui, chief information security officer of Neiman Marcus, in an interview with PYMNTS. “Any measure of security introduces friction. So, the challenge is to make security as transparent as possible while still protecting the customer’s personal information.” The luxury retailer has been using device fingerprinting to identify devices based on unique configurations – and, ultimately, to determine whether it’s being used by a human or is automated. “We are investing heavily in fraud detection systems that [use] machine learning and artificial intelligence to differentiate between normal patterns of customer behavior and potentially fraudulent ones,” Siddiqui said of the retailer’s approach to identity theft and other types of fraud. “These are patterns that would not be visible to the naked eye.” Fraudsters are getting more sophisticated, making use of bots to mimic typical online shopping behavior. After Neiman Marcus identified a bot attack, the hackers started including mouse movements to fool detection systems. Gaming Due to in-game purchasing becoming more standard – a recent study found that approximately half of all personal computer (PC) and console gamers spend money in-game, a share that climbs to more than 75 percent for mobile gamers – gaming platforms have become an attractive target for fraud, especially for hackers who acquire personal data via account takeovers. Gaming and gambling sites face similar issues, as too many security measures can turn off users who will go elsewhere. Some sites are reluctant to implement overly stringent security measures. Beyond using machine learning to detect fraud before it happens, gaming platforms are also using liveness detection, which requires players to be physically present during the verification process so they can submit photos, video playback or audio recordings to confirm their identities. Fingerprints, voice prints and other forms of biometric authentication are gaining steam in the arsenal of fraud-fighting tools. More than 63 percent of all smartphones manufactured in 2017 incorporated some type of biometric authentication, and a growing share of devices are expected to offer these solutions as fraud increases.](https://securecdn.pymnts.com/wp-content/uploads/2019/06/digital-fraud-ai-tools-80x80.jpg)
1.1KSecurity & FraudAI Helps Businesses Get Smarter About Fraud
If it seems like cases of fraud and hacking are always in the news, that’s because new incidents pop up practically every...
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868B2B PaymentsB2B Pursues An Amazon-Like Experience
In the world of tech and commerce, everybody wants to be like Amazon. That’s particularly true in the B2B eCommerce space, as...
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1.1KB2B PaymentsWhitepages Pro Spins Out, Becomes Ekata
Whitepages Pro is playing the long game when it comes to payments, with a series of structural changes separating consumer and B2B...
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1.4KArtificial IntelligenceWhy Aren’t More FIs Using AI To Fight Fraud?
Payment fraud is an ideal use case for machine learning and artificial intelligence (AI), and has been used by financial institutions (FIs)...
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1.1KB2B PaymentsOrdo, CGI Collaborate To Combat Invoice Payments Fraud
Business consultancy CGI has announced a collaboration with invoice payments FinTech Ordo to develop a service that combats fraud for both payers...
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4.2KAuthenticationTaking The Future Of Digital ID Verification Back To The Phone
The rise of the digital economy has resulted in growing concerns about identification, not the least of which is making sure that...
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3.4KArtificial IntelligenceWhy AI Is MIA In Most FI Fraud Departments
In the old days, forged checks were the biggest problems that bank fraud departments had to manage. Today, financial institutions (FIs) face...
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3.0KDigital PaymentsPayPal Commerce Platform To Help SMBs Compete With Amazon
PayPal announced on Monday (June 3) the launch of the PayPal Commerce Platform, which is designed to meet the needs of marketplaces,...
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2.3KRetailWhy Digital Marketplaces Must Anticipate Shoppers’ Needs
With abundant choices in many aspects of their lives, consumers expect a range of options when it comes to online shopping, ranging...
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3.8KIntelligence of ThingsWhy An Incremental Approach May Be Key To IoT Security
California’s recent IoT security law, mandating minimum security requirements for connected devices, attempts to thwart fraudsters and other bad actors. But while...
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2.3KSecurity & FraudWirecard Partners With India To Create Digital Taxpayer ID Cards
Wirecard, the global digital financial technology company, announced on Wednesday (May 22) that it has partnered with India’s government-owned UTI Infrastructure Technology...
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3.5KBankingPaving Mobile Banking’s Path To Success
The customer journey in banking begins with offering a wealth of data when opening an account. As Jim Priestley, chief revenue officer...
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3.2KToday In DataA Look Into The Future Of Payments And Commerce
The future of customer service will include humans and robots working in cahoots. The future of Mastercard — and its issuers and...
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3.4KRetailOnline Retailers Face New Threats From Hackers
Death, taxes and data breaches – those are perhaps the only sure things in life, and new evidence is emerging that hackers...
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2.1Kcall center commerceHow Genesys Is Personalizing Call Center Interactions
With each call center generating more than 30,000 hours of interactions weekly, it's nearly impossible for analysts to find valuable customer data...
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5.4KAuthenticationStaring Down The Sharing Economy’s Big Trust Moment
One of the more interesting – and perhaps even amusing – parts of human nature comes from the assumptions we attach to examples...
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2.8KToday In DataThe Innovation Race With Fraudsters Worldwide
For every innovation in payments and commerce worldwide – faster payments, marketplace-based commerce, self-service retail – there always seems to be a...
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1.7KToday In DataBalancing Secure And Seamless Commerce
That customers want everything faster is a fact of life in the digital economy. From the amount of time it takes to...
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2.9KB2B PaymentsCiti Treasury Eyes Verification Tech To Support Faster Payments
Citi’s Treasury and Trade Solutions (TTS) is rolling out a new identity and account verification solution for corporate treasurer clients. In a...
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3.2KAuthenticationAre Merchants Ready For PSD2 And SCA’s 150-Millisecond Learning Curve?
PSD2 will change – indeed is changing – online commerce in Europe and beyond. In a podcast with PYMNTS’ Karen Webster, Rob...
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3.8KFraud PreventionFraudsters’ Latest Target: Dead People
Back in the golden olden days of print newspapers, bad guys would regularly read the obituaries, then craft a plan to break...
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1.8KToday In DataTraveling A Tech Road for Better T&E Management
Beating the paper chase remains an elusive goal, but one that is devoutly pursued by firms of all sizes – especially when...
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4.4KAuthenticationWinning The Arms Race Against Fraudsters — With Selfies
It may seem like ancient history now — about four years ago, the idea that consumers, merchants, financial institutions (FIs) and payment...
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2.6KToday In DataTaking Digital Authentication To The Next Level
Gaming companies are taking digital authentication to the next level. Smart agents are rising to bring better customer service and fraud prevention to financial institutions (FI)...
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7.5KInnovationSmart Agents Are AI’s DNA — Here’s Why
Inspiration comes from anywhere and everywhere, and that goes for digital innovation in payments and commerce. Just ask Akli Adjaoute, CEO of Brighterion (a Mastercard company),...
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2.3KToday In DataThe Latest Advances In Payments And Fraud Prevention
Point-of-sale financing just got a big boost via an acquisition that could lead to more payment synergies down the road. Meanwhile, the new...
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6.0KRegulationStripe On SCA’s $100B-A-Year Problem
Strong Customer Authentication (SCA) is set to debut on September 14, and there’s a $100 billion problem looming if merchants across Europe...
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4.6KInvestmentsPayfone Nabs $24M In Funding; Partners With TransUnion
Payfone announced that it has secured a $24 million funding round, led by TransUnion. The funding also included participation from existing investors...
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6.2KSecurity & FraudWhy Patterns Are Breaking Fraud Fighting’s Old Rules
Fraud evolves as the bad guys do, trying to stay one step ahead of technology and risk management efforts. Jack Bloch, SVP...
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3.1KSecurity & FraudLyft Rolls Out Enhanced And Continuous Driver Background Checks
Lyft, the newly public ride-hailing company, announced Monday (April 15) two new initiatives aimed at increasing the safety and security of its...
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4.3KFraud AttackOnline Porn Pays Off For Fraudsters
Like it or not, pornography — among the most ancient human creative endeavors — is a central player in the digital world...
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6.2KMastercardWanted: Cybersecurity Aces — Mastercard, Partners Have A Plan
Here’s a bit of heresy for 2019: Data’s not everything. Sure, data often gets called the oil of the digital age — and...
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6.9KArtificial IntelligenceAI Enters The FI Fast Lane
It’s hard to find fault with one of the latest tests of artificial intelligence (AI). Medical diagnostic technology built by Google and a...
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5.5KDigital PaymentsHow Payments Help The Sharing Economy Run On Trust
All those children’s TV shows and stories lied: Sharing is not easy. Sharing is, in fact, enormously complex, prone to fraud and...
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4.1KRetailHow FinTechs Start With The End In Mind For Payments
FinTech firms are creating offerings to make it easier for retailers to handle their payments on the back end. Modo, for example,...
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3.5KToday In DataThe Push For Cybersecurity Technology At Credit Unions
Credit union (CU) associations and service providers are pushing for the adoption of technology to help with security and compliance. In retail,...
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5.3KAuthenticationIdentity Verification By The (Phone) Numbers
Cognito CEO Alain Meier and his colleagues at the identify verification service have a peculiar way of freaking out payment and commerce...
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3.1KToday In DataTrust Cements Consumers To The Credit Union
To keep them coming back, get them to trust you – and work to keep that trust. That’s a wise maxim to...
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3.2KSecurity & FraudFinancial Scams Against UK Consumers, Biz Up 16 Pct
Financial scams perpetrated against U.K. households and companies increased 16 percent in 2018, according to new data. The Financial Times, citing the...
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4.6KToday In DataThinking Differently On Digital Payments And Data
Data breaches are a serious threat to the financial health of businesses and consumers. Is there a newer way to treat data that...
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7.3KPartnerships / AcquisitionsMastercard Buys Ethoca To Boost Fraud-Fighting Chops
Mastercard announced Tuesday (March 12) that it has inked a deal to acquire Ethoca, a global provider of technology to identify and...
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10.2KDigital BankingHow Wells Fargo Uses AI, Biometrics To Fight Money Laundering
Digital banking customers of today aren’t looking for the bank with the newest features — they’re looking for the bank that can...
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4.8KToday In DataAdjusting To PSD2 And GDPR In Europe
Consumers in the European Union (EU) are adjusting to Payments Service Directive 2 (PSD2) and General Data Protection Regulation (GDPR), even though these regulations focus on...
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5.8KFraud PreventionSenate Hearing Grills Equifax, Marriott CEOs On Data Breaches
Data privacy and security is becoming a popular political issue, and the latest proof of that came Thursday (March 7) on Capitol...
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4.6KFraud PreventionA New Way To Gain Ground On Fraud
New technologies keep emerging in the fight against fraud — biometrics, for instance — but they are not the only part of pushing...
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6.7KCredit UnionsPenFed’s Playbook On Helping Government Workers Survive Shutdowns
From cannabis legalization to the federal shutdown, government actions are reshaping financial circumstances for consumers and businesses alike. In the March Credit...
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7.4KeCommerceMarketplaces: The Difference Between Fail And Scale
Shopping on a traditional, narrowly focused eCommerce site is one thing. Consumers are dealing with a single merchant, and the working assumption...
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5.5KRetailCracking Down On The Counterfeit Culture
All Deborah Copaken really wanted was a warm coat. A good coat. A Canada Goose coat. Sure, it cost more than $900...
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2.8KToday In DataDigital Tech Removes The Drama From Payments And Commerce
For consumers, merchants and financial institutions, drama usually means hassle, frustration and lost sales. When it comes to the fast-growing world of...