Artificial intelligence is a key driver in both perpetrating and preventing fraud. Fraud attempts have surged, with AI enabling more sophisticated attacks, such as deep fakes and phishing scams. Companies like Visa and Mastercard use AI to monitor transactions and detect suspicious activities, while fintech startups are developing new tools to combat fraud. Despite technological advancements, human behavior remains a critical factor in scams, with social engineering attacks on the rise. Both Visa and TransUnion emphasize the importance of consumer awareness and the potential benefits of introducing friction in transactions to deter fraudsters.
Key takeaways:
- Visa and Mastercard are investing heavily in anti-fraud technology and treating fraud prevention as a business opportunity, with Visa generating $1.5 billion from selling risk and security services in 2024.
- Artificial intelligence is a significant driver in both the increase of fraud attempts and the development of sophisticated fraud prevention tools, with companies like Visa using AI to monitor and analyze transactions.
- Human behavior remains a critical factor in fraud, with social engineering attacks and phishing scams exploiting consumer vulnerabilities, prompting companies to focus on consumer education and scam disruption practices.
- The concept of "fraud as a service" is emerging, where fraudsters sell their schemes to others, paralleling how companies sell anti-fraud expertise, highlighting the ongoing arms race between fraudsters and fraud prevention efforts.