According to various reports, US consumers lost around $6 billion to fraud in 2021. That’s a 70% increase from last year’s estimated loss of $2 billion due to scams. The FTC – Federal Trade Commission – revealed that around 3 billion people filed fraud complaints last year. That’s a new record in fraud complaints in the US.
Fraudsters and scammers target individuals, businesses, and financial institutions the most. Every day, they are incorporating newer techniques to exploit people and organizations. Common targets include banks, debit and credit cards, online banking systems, etc. Besides, fraudsters also target people’s driver’s licenses, healthcare, tax refunds, etc.
However, among all the victims, businesses are the ones that have to suffer the most because of fraudsters. That’s because businesses are not always cautious about these things. It’s especially true for smaller businesses. Despite being careful and able to identify fraud attempts, it’s usually too late before these small businesses can do something about it.
Once a business falls victim to fraud, it loses the trust of its clients and customers in addition to money and assets. That’s even more damaging than losing financial assets.
So, to protect themselves from such frauds, businesses are turning to modern technology. More specifically, they turn to artificial intelligence to secure themselves from fraudsters.
What is the Best Way to Protect Businesses from Frauds?
Prevention is always better than cure, even when it comes to fraud. It’s always better to protect yourself from fraudsters than to run after them once you become their victim. The best way to ensure that is by deploying an identity verification method.
Given how dependent we are on the internet, it’s no surprise that our digital identities are most susceptible to fraud attacks. Recently, the rise in synthetic fraud attempts in the US is also a concern. Therefore, the only way to combat these attacks is by ensuring state-of-the-art ID authentication and verification methods. Only AI-based ID verification systems can meet such standards and demands.
How is AI Helping Businesses?
AI’s role in shaping our modern world is incomparable, especially for businesses and industries. From automating large industrial operations to facilitating smart office spaces. AI is touching all possible spheres in companies and workplaces. That, in turn, allows these areas to become more efficient and less costly.
Logistic companies are using AI to keep track of their fleet and shipments, while heavy industries are using it to monitor machinery and keep their production-line efficient. Some businesses utilize AI and data science to analyze vast volumes of data, allowing them to predict future business situations and tackle them appropriately.
Another area that AI is helping with is identity verification and fraud detection. That’s what we will be focusing on today.
How Can AI Help with Identity Verification?
AU10TIX is an identity intelligence and management company. They use AI-powered systems that aid in identity verification and fraud detection. AU10TIX is a world-renowned brand and has the trust of companies like Google, Microsoft, Fiverr, PayPal, Twitter, Uber, and many others.
So, it’s only logical that we try to establish the working mechanism of AI-based ID verification and fraud detection systems by looking at their working model.
We can break down the AI’s verification and fraud detection model into six groups.
ID Document Verification
Here, the AI will extract and screen ID documents in real-time. The AI will use advanced image processing capabilities to cross-match the data and images with the appropriate reference data to validate the ID.
An individual’s physical features are their most unique aspects. Artificial intelligence relies on these aspects to assigning specific user data points. Based on the data of their physical aspects, AI manages the biometric authentication methods.
Biometric authentication uses eye, fingerprint, and facial shape to analyze and verify IDs. Advanced facial mapping facilitates this process.
Electronic Data Verification
Utilizes data to electronically verify a user’s identity even when they are not present on site. That allows for virtual verification of users and clients.
Machine Learning Automation
The more you use the system, the better the AI gets. Using neural networks, AI can make the screening and verification process faster. Gathering data is a part of the entire operation. The more data the system has, the better it can perform. That’s especially true when the AI has to detect fraudulent IDs and login attempts.
Different AI-based systems use various techniques to identify frauds. These methods are classified to protect the integrity of the systems. Making them public knowledge would allow fraudsters to take advantage and misuse the information.
Data-Driven Decision Making
Modern methods rely on data for more accurate processing. They use real-time data and historical data to identify patterns. That allows them to spot anything wrong in the documents or IDs, even when the fraudster is extremely smart or technical.
Different AI-based ID verification systems use different methods to analyze and detect frauds. However, these six inclusions highlight AI’s best in this regard.
Where Can You Deploy AI-Based Verification Systems?
Businesses and financial institutions use AI-based ID verification and fraud detection systems in many areas. Some of these applications are as follows.
- Banks use them for document verification. The AI measures every small detail like font size, line-spacing, letter-spacing, etc.
- Businesses use AI-based ID verification methods to prevent unauthorized access to computers and server rooms. AI makes it easier to ensure multi-level security layers in the workplace.
- People are using these verification methods to verify NFT claims and user identities.
- Airports are using AI-based verification for passenger screening.
- Militaries in various parts of the world are using similar AI-based systems for border control.
All this proves that artificial intelligence has come a long way. Businesses are taking full advantage of these AI-based verification systems and reaping numerous benefits. They keep their integrities intact by obliterating fraud at the root levels.