Over the last two years, fraud detection and prevention in financial services has faced unprecedented challenges. Factors such as the uncertain economy, ongoing global conflicts, the wider adoption of diverse payment methods, and the development of AI – often used for deep fakes and automating cyberattacks – have contributed to the rise in fraud. According to NICE Actimize’s 2024 Fraud Insights report, authorised fraud grew by 22% in 2023, with the average fraudulent transaction amount surging by 43% to reach USD 3,222.
AI has become integral to various business segments within financial institutions, with applications primarily focused on financial reporting, accounting, and fraud detection. However, despite its many benefits, financial institutions continue to face challenges in AI implementation.
Additionally, compliance obligations are growing, often exceeding the capacity of many organisations. This strain is due not only to current regulations but also to new ones coming into effect, such as the AI Act, DORA, the new APP fraud requirements, and PSD3.
In this context, The Paypers’ Next-Gen Technologies to Detect Fraud and Financial Crime Report reveals the latest fraud threats and technological developments that financial institutions, banks, fintechs, and PSPs must be aware of to ensure safer digital transactions for businesses and consumers.
The growing scale of fraud – key fraud types that made headlines in 2024 (APP fraud, investment scams, romance scams, social engineering, ransomware).
The instant payments dilemma – why introducing ‘healthy friction’ in today’s instant transactions may help prevent payment fraud.• Regulatory pressure and compliance costs – how AI models specifically trained to detect APP fraud can help financial institutions navigate new requirements more effectively.
Unlocking the power of data sharing – why integrating data-sharing frameworks is essential for building AI models that deliver meaningful insights and results.
The FRAML approach – how financial institutions can identify overlapping risks, share data, and streamline anti-crime strategies by merging fraud and AML efforts.
AI’s role in ecommerce and payment ecosystems – how to leverage AI to detect high-risk behaviours in ecommerce platforms.
Where to begin with AI in financial services – how firms can unlock the full potential of AI in the fight against financial crime by following a clear framework.
We would like to extend our heartfelt thanks to all our contributors to the Next-Gen Technologies to Detect Fraud and Financial Crime Report 2024, as well as to our key media partner, Qube Events.
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