Fraud is a big issue for businesses, especially in the finance industry. In fact, there were roughly more than $10 billion in fraud losses in 2023. This statistic is why there is such a large movement for improved fraud detection for accounting firms and similar companies, and this will likely continue for years to come.
But how can companies enhance their fraud detection? There are numerous ways to do this, but it can be complicated, especially as fraudulent activities have adapted to technology. To ensure businesses in the finance industry are adequately prepared, this post explains how to enhance fraud detection in three simple ways.
Use AI and Machine Learning
Both artificial intelligence (AI) and machine learning (ML) have become invaluable tools in protecting companies against fraud. Companies can now be proactive by highlighting suspicious attributes and/or behaviors instead of being left to react when fraud becomes noticeable and presents itself.
AI fraud detection, which uses ML techniques, will identify and prevent suspicious activities. This is accomplished by analyzing large sets of data to recognize patterns that show possible fraudulent activities. These models learn from patterns and trends that can be used to emphasize suspect qualities, which might be missed by human analysts. These suspicious attributes could imply fraud.
With finances mostly involving numbers and text, generative AI and large language models (LLMs) are being used to improve fraud detection, too. Open source LLMs have been used to predict a customer’s next transaction, which can assess risks and block fraudulent transactions.
Streamline Your Customer Processes
The speed of identifying and preventing fraudulent activities is vital, and streamlining customer processes can improve this. Fraud detection will be much faster and more efficient if the systems are automated. Automated systems will cross-verify data, flag suspicious activities, and gather essential documentation, and this will enable quicker decision-making. It also reduces the operational costs.
Real-time monitoring should also be used to streamline processes. Customer behavior and transactions are two of the most important factors to monitor, and this could allow for immediate identification of suspicious activities. The business will be protecting its customers through this, as well as reducing the risks of possible financial losses from fraud. This could save the business time and money in the long run.
These streamlined processes could then reduce the time it takes to detect fraud. They are also less likely to identify false positives, with the technology being equipped to learn from past incidents and more accurately detect fraud in the future.
Investigate with Intelligent Case Management
When incidents of fraud, or even potential fraud, occur, it is vital to investigate them. This is why companies in the finance industry, like accounting firms, should use intelligent case management. Intelligent case management provides a unified view of data to enable investigators to access relevant information quickly. They can then prioritize cases and identify anomalies that could indicate fraudulent activity.
Case management that is AI-driven can reduce the time spent on manual reviews and searches. This is achieved by consolidating data from multiple sources into a single platform. With all of this information in one place, and real-time monitoring, companies can respond to potential fraud in a timely manner, and this will further minimize financial damages and reputational harm.
To conclude, enhancing fraud detection is a crucial aspect for businesses in the finance industry. Thankfully, this post outlines three of the best methods to do this.