Connecting The Cord Between AI & Payments Security QPS WHITEPAPER

Transcription

1 Connecting The Cord Between AI & Payments Security QPS WHITEPAPER

2 2 TABLE OF CONTENTS Introduction 3 How AI Is Different From Machine Learning 3 Paving the Future of Financial Fraud Detection 4 Machine Learning To Fight Fraud 4 Database Will Empower the AI 5 Future of AI 5 How Financial Institutions can benefit from AI 6 Know the Risk 6 QPS Coupling Machine Learning And Robotic 7 Let QPS Do It for You 7 Resources 9 Connect with QPS 10

3 3 INTRODUCTION Costs associated with cybercrime are expected to top $2 Trillion in 2020 and will keep getting larger with the increased use of advanced technology by cybercriminals in executing fraudulent attacks. Unregulated crypto currency exchanges will benefit fraudsters to cash out the return of their criminal activities anonymously. It is imperative to use the most advanced techniques available to fight cybercrime and remain one step ahead. Machine learning is the answer to this, an application of artificial intelligence (AI) that allows computers to learn without being explicitly programmed to do so. Machine learning can quickly draw valuable insight from the data and learn from the findings. It can enhance early warning system and allows automated monitoring, reporting and potential actions in real-time with accuracy. How AI is Different from Machine Learning AI is a technology that resembles with human intelligence and machine learning, which is a subset of AI and uses mathematical models from data to make decisions. Machine Learning is an algorithm whose performance improves as they are exposed to more data over time.

4 4 Incorporated with tools that we use every day to make them efficient and also enhance their output for achieving desired result. Paving the Future of Financial Fraud Detection Both Artificial Intelligence and Machine Learning will play an instrumental role in defining the technologies belonging to future generations. Their understanding will be crucial for better understanding of the devices and technology that we use every day. AI is being increasingly used in the financial services sector to predict consumer behavior by matching new payments with the past transaction records to quickly spot possible anomalies or fraud. It is slowly gaining attention from financial institutions (FIs) and payment solution companies for the past few years. AI is proving to be useful in preventing digital attacks on modern payment systems. Not only this, AI can also improve operational efficiency and better customer engagement. Machine Learning To Fight Fraud Account Takeovers Account Takeover (ATO) is damaging reputations for merchants and FIs globally. ATO often begins with a data breach and eventually leads to financial losses. Machine learning drives a new approach that excels at identifying the common red flags of ATO in real-time. Credit Card Fraud The most common form of cybercrime is credit card fraud, which is exacerbated by the growth in online banking. The speed at which financial losses can occur by a credit card fraud makes intelligent fraud detection approach increasingly important. Machine learning removes the requirement for manual fact checking and approvals. It facilitates real-time decisions mitigating fraud and restraining fraudsters from inflicting financial losses.

5 5 Card Not Present (CNP) Fraud New machine learning driven CNP fraud fighting models are yielding 30% increase in fraud detection over previous approaches. The main advantage of AI implementation is to increase customer satisfaction and identify fraudulent transactions with pinpoint precision. CNP fraud detection models are detecting fraudulent e-commerce fraud transactions as quickly as possible, to prevent significant fraud loss from an account and rising chargeback. Database Will Empower the AI Data analysis is the right strategy for detecting fraud. With the availability of large volumes of customer data, together with transactional data, AI can be used to effectively identify irregular behavior patterns in real-time for specific customers on different scenarios. AI has the potential ability to analyze a large variety of data to continually fit different customers and transactions into the best-suited clusters for accurate comparison. Thus, as the spending habits of a customer changes, the model would automatically adjust what it views as fraudulent transactions. This could reduce actual fraudulent transactions and minimize false positives. Future of AI Development in AI is making algorithms infinitely smarter. New generation of algorithms that are based on people thought process is faster and reliable in detecting the anomaly. New models are much more sensitive to malicious single transactions.

6 6 Automation of security analytics and operations and orchestration through artificial intelligence and machine learning will help integrate external threat intelligence with internal security data to reduce the turnaround time in incident detection and response -GANESH VISWANATHAN, Senior VP-Quality & Compliance, QPS How Financial Institutions Can Benefit From AI Algorithms spot trends in historical data and use this to make predictions based on new data. It can spot very minute differences and similarities not visible to the human eye. It can compute large data at a much higher speed and offer better results. Algorithms learn and improve from each repetition and automation of such processes offer huge savings. Machine learning techniques allow FIs to understand their customer better and provide them with more customized services called customer segmentation. This customer segmentation can be used to build predictive supervised models with learning algorithm which learns individual customer s pattern, preferences, and changes in spending habit. This results in less false positive and increased customer satisfaction. Other benefits associated with it are: More personalized product offering for the customer. The speed of service with high accuracy and low error rate. Reduce human involvement and can monitor transactions 24x7x365 Increase in revenue with successful red flag identification, fraud prediction and low chargeback Know The Risk Financial institutions and merchants need to understand the fraud risks and how they can protect themselves before irreparable damage is done to their customers, and to their reputations. Machine learning is a reality now. It can be implemented within the restraints of your existing core system with relative ease. You can pass the benefit to your clients which will enhance loyalty..

7 7 Robotic Process Automation Earning The Dividends As we are steadily moving towards digitalization and virtualization, QPS recognizes and implements innovative approaches of machine learning and robotic process automation for effective behavior analytics and payment solutions. Due to fast evolving and highly complex regulatory landscape and rapid digitization, it has become imperative for businesses to be highly proactive. Recognizing this requirement, QPS has equipped its services and solutions with the critical element of robotics for effective transaction monitoring and mitigating fraud losses erupting out of data breaches and rampant fraud incidents. Partner With QPS For Next-Gen Payment Solutions QPS helps FIs and Merchants (e-commerce and traditional), with an end-to-end fraud and risk mitigation and payment processing solution, covered by a 24/7 service window with access to seasoned fraud analysts and best of breed artificial intelligence and machine-learning technology. QPS' blend of man and machine is continues to revolutionize fraud prevention and payments processing, securing all payment channel transactions and fraud types including: For Financial Institutions Plastic Cards (credit, debit and prepaid) Check, ACH/ SDACH and Wire Alternate Payment Methods (APM), Mobile and Online Payments For Merchants Card-not-present (CNP) Chargeback QPS Payment Gateway The global full service payment gateway by QPS is integrated with evolving behavior analytics capabilities powered by machine learning ensuring fast and secure transactions to support all leading payment methods.

8 8 With QPS more fraud is being prevented, more customers are satisfied, and fraudsters lose a major battle in an endless war

9 9 RESOURCES

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