The debate surrounding artificial intelligence usually spirals into science fiction. While the threat of artificial intelligence being used for harmful ends is something that must be overcome before it can be incorporated into all aspects of human life, focusing solely on the morality of these potentially powerful tools limits the scope of the conversation. AI can do more good than harm if the right protocols are followed in its development. In fact, it has already been put to use in the financial industry as a tool for fraud prevention, helping users secure their finances from the risks posed by the digitization of these services.
What is all the fuss surrounding AI about?
Will artificial intelligence turn evil and control human beings? Superior intelligence facilitates control. It is why human beings have been able to keep lions in zoos, despite their vicious nature. However, machines are not inherently good or evil, only having a specific set of goals. Target-locking missiles are not considered evil, despite their potential for harmful use. Conversely, the biggest threat human beings will face with artificial intelligence is the risk of misaligned goals, as opposed to killer robots.
Instead of focusing on the potential of AI based on science fiction, the conversation should revolve around its characteristics. Artificial intelligence imitates the traits of the human mind such as optimal decision making, reasoning, planning and sensory perception in a significantly higher capacity. AI features machine learning, which can be developed to identify patterns and trends at a much higher level than human beings. It is one of the key reasons why AI is being considered for fraud prevention, as discussed below.
AI requires minimal human intervention, due to its ability to function at a much higher capacity. It is faster and more accurate than both human beings and machines of the day at addressing computational problems, which suggests it can be useful for increased efficiency across multiple platforms. AI can cope with situational problems and provide dynamic solutions, allowing for better problem-solving efforts. The high capacity of AI has the potential to provide benefit to a lot of sectors.
Can AI really prevent fraud?
Fraud is easily the biggest problem financial institutions face. The increase in the number of global transactions and integration across different media has made it easier for faceless fraudsters to carry out heinous crimes anonymously. The lack of sufficient regulation or the technological infrastructure has not made it any easier for financial institutions to address this problem. But AI can offer a solution.
AI is better equipped to pick up on patterns, habits, and irregularities that a human observer might not be able to perceive. For instance, AI would be able to detect credit card fraud by analyzing the distance and time between purchases. Machine learning, which is both more precise and efficient than human learning, can help these tools understand how to pick up on fraud by simply analyzing patterns in photographs, videos, and audio. Many financial institutions have already taken up fraud prevention measures that are powered by artificial intelligence.
The future does not look completely rosy for these parties, however, since malicious persons could learn how to use artificial intelligence for their own ends too. Recent efforts have seen hackers use AI to make malware more difficult to identify and address. There is clearly a need for better frameworks to improve the fraud prevention efforts, even against similarly armed fraudsters.
So how can AI be used for fraud prevention successfully? Aside from setting up AI, financial institutions will need to incorporate better technological infrastructure to support fraud prevention. This can begin by instituting added layers of security beyond the basic memorable password. Combining artificial intelligence with high-end technology, such as biometric authentication, will facilitate better security efforts. Using artificial and human intelligence in tandem could also go some way into streamlining fraud prevention efforts.
As research and development continue to make waves in artificial intelligence, the future of finance looks brighter and more secure than ever before. At Chango Inc., we are dedicated to incorporating innovative technology into different aspects of your digital experience for unprecedented levels of customer satisfaction. We are currently exploring and developing proprietary technology to help actualize the future of finance.