6 Ways Technology Can Prevent Fraud cybernews.com
6 Ways Technology Can Prevent Fraud cybernews.com

6 Ways Technology Can Prevent Fraud

Fraud, which encompasses identity theft, phishing, inappropriate payments, money laundering, and terrorist financing, is a constant challenge for any organization. As per PwC’s Global Economic Crime and Fraud Survey published in 2022, more than half of enterprise-level organizations experienced fraud in the last two years.

In these times, fraudsters come up with sophisticated tactics, so it is important to stay ahead of the game and control fraudulent activities as much as possible. Organizations should understand how technology can be used to combat online fraud and reduce the risk of being a target.

6 Ways Technology Help Fighting Fraud

Different technologies have come forward to help companies prevent and combat fraud. Here are the six main ways which have a significant part to play in any fraud prevention strategy:

Predictive Analytics

Data analytics can generate cyber signals that identify risk exposure and tell a cyber event in advance. The Association of Certified Fraud Examiners highlights that purchasing is a risky department where companies use data analytics up to 41% to monitor for potential fraud.

Predictive analytics, a kind of data analytics, analyzes and interprets so many data sets to make predictions or assumptions regarding risks and the chance of something happening. Similar to anomaly detection, predictive analytics utilize artificial intelligence and machine learning to identify patterns and focus on risks and inconsistencies that would not be spotted otherwise.

Blockchain

Blockchain is a decentralized solution that uses a distributed ledger to enable secure and transparent record-keeping. It leverages end-to-end encryption, which blocks out fraud and unauthorized activities.

Furthermore, blockchain enables data to be stored on different devices, making it difficult to hack. Blockchain can also handle privacy concerns in a better way than traditional systems by making data anonymous and needing permissions to limit access.

Many cyber defense companies, like Infovys, offer exclusive security services to protect individuals, organizations, and governments from cyber attacks. Their founders and advisors, with years of technical experience and expertise, have introduced a blockchain platform to help businesses and governments keep their data secure and systems safe.

Artificial Intelligence

Machine intelligence, or artificial intelligence (AI), is a branch of computer science that involves the development of computer systems having the ability to perform tasks that are typically performed by human intelligence.

After getting implemented in the financial services industry to combat online fraud, today, artificial intelligence is extensively used to detect, prevent, and fight fraud in many other fields where data analysis is key.

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AI boasts the capability to make decisions and process information much more quickly than human beings, which makes it ideal for fraud prevention. It analyzes data to make predictions and draw conclusions.

This technology repeatedly scans transaction data for anomalies and indicates any activities that appear to deviate from usual patterns. It also provides real-time risk scores and deeper insight into where best to define threshold scores in order to reduce fraud losses.

Machine Learning

A subset of artificial intelligence, machine learning (ML) detects patterns in data and forms predictions using it in fraud detection systems. Different fields like insurance and healthcare use machine learning to help identify and prevent fraud in their systems and guard their users against financial loss and identity theft when suspicious activities are detected.

For fraud prevention, AI algorithms can be used to program ML algorithms for recognizing patterns in data that indicate fraudulent activities. A good example is that a company might use AI to program an ML algorithm to monitor daily credit card transactions and identify spending patterns that show any risk of fraud.

Deep anomaly detection (DAD) is an example of a machine learning technique that greatly helps in preventing claims fraud. It basically builds a model that can be compared with extensive data sets to pinpoint anomalies.

Biometrics

Biometrics serve as a central element of a layered approach to the authentication procedure. It eliminates the chances of an unauthorized party accessing the network to commit fraud and other identity-related unlawful acts.

This form of identification works by measuring and analyzing biological characteristics, such as fingerprints, facial patterns, or eye retinas. Biometrics clean up poor password hygiene, like the reuse of credentials across accounts and picking easy passwords.

Enterprise-level biometrics close gaps in the re-verification process to fight fraud. Multi-factor authentication (MFA) solution uses biometrics to offer a more straightforward solution than a single-factor password-based solution.

Virtual Private Network

A virtual private network (VPN) is a technology that creates an encrypted tunnel between two computers or networks. Using a VPN is one of the best options to protect yourself from online fraud and improve your cybersecurity.

VPNs offer protection against phishing scams, which involves the distribution of malicious links or attachments through fake messages and emails to infect a device with malware.

It also saves from identity theft, which includes using somebody else’s personal information to perform illegal acts. A VPN encrypts data and makes it unreadable for anybody intercepting it.

In addition, a VPN protects individuals and organizations from credit card fraud and ransomware attacks. It encrypts transactions and blocks malicious downloads to prevent hackers from accessing a network or device.

However, not all VPNs are created equal. While some may offer low-quality service, many VPN providers offer an extra level of security against fraud. Different types of VPNs are available, which offer a different level of service for a range of operating systems.

Closing Thoughts

In all, having a strong fraud prevention infrastructure in place can highly minimize the risk of financial losses and procedural disruption due to fraud. Fraud detection and prevention technology helps companies increase their detection capabilities, reduce the number of false claims, and cut down on the cost it takes to look into potential fraudulent activities.

Fraud, which encompasses identity theft, phishing, inappropriate payments, money laundering, and terrorist financing, is a constant challenge for any organization. As per PwC’s Global Economic Crime and Fraud Survey published in 2022, more than half of enterprise-level organizations experienced fraud in the last two years.

In these times, fraudsters come up with sophisticated tactics, so it is important to stay ahead of the game and control fraudulent activities as much as possible. Organizations should understand how technology can be used to combat online fraud and reduce the risk of being a target.

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