Preeti
Generative AI is revolutionizing payments fraud detection by offering continuous learning and adapting capabilities, reducing false positives, and improving consumer experiences. Traditional rules-based systems are inadequate in detecting complex fraud schemes, leading to high false positives and limited adaptability. Predictive AI and generative AI, using unsupervised or semi-supervised learning, excel at detecting subtle and novel fraud patterns in unstructured data, significantly enhancing fraud detection capabilities. Generative AI can also produce synthetic datasets for model training without compromising privacy or compliance.
Industry leaders like Visa and Mastercard have already built and deployed their own generative AI payments fraud detection tools, showcasing the technology’s potential benefits. However, challenges such as privacy concerns, bias, and regulatory hurdles must be addressed for broader adoption. The financial industry is excited about generative AI’s potential to fight fraud, with 83% of financial institutions considering its use. As the technology matures and gains traction, it could become a cornerstone of modern payments fraud prevention strategies, offering improvements in accuracy, efficiency, and cost savings.
Generative AI’s ability to overcome the limitations of traditional fraud detection systems has garnered attention in the financial industry, with implications for safeguarding the purchasing experience and improving financial institutions’ bottom line. Despite the technology’s sophistication and benefits, obstacles to industry-wide adoption exist, requiring solutions to privacy, bias, and regulatory challenges. Overall, generative AI shows promise in transforming fraud fighting in the payments industry, but further development and addressing key issues are necessary for widespread adoption.
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Source link: https://www.pymnts.com/news/artificial-intelligence/2024/new-data-genai-emerges-as-effective-weapon-in-banks-war-to-reduce-false-positives/
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