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The financial sector is grappling with a major challenge: fraud tactics are becoming more sophisticated, putting financial systems at risk. Generative AI (GenAI) is helping to tackle this problem by transforming how fraud investigations are conducted by enhancing the efficiency and effectiveness of detection, prediction, and prevention. Discover the many ways Generative AI is improving the fight against fraud and how businesses can leverage its transformative capabilities.

The Case for Faster and More Accurate Fraud Investigation

When fraud investigation systems are inefficient, businesses will have to contend with significant financial setbacks, reputational damage, and regulatory penalties. Failure to detect and report fraud not only results in legal fines but can also impact ROI. Financial institutions in North America are now losing $4.45 for every $1 of fraud loss, a 28% increase from the previous year.

Research also highlights the critical impact of faulty fraud investigations, with merchants losing up to 75x more revenue due to false declines compared to actual fraud losses. False declines occur when customers are blocked from completing a purchase or any other action, often due to mistakenly suspected fraud. This leads to unhappy customers, lost sales, and more work for fraud teams.

The key is to enable faster and more accurate fraud investigation, enabling the financial industry to easily flag and respond to suspicious activities more efficiently. Advanced technologies such as Generative AI can take this a step further, with its ability to process and analyze vast amounts of data in real time. For example, it can expedite the process of identifying negative news and cut down alert review times by up to 90%, automating intelligent open-source research for fraud.

How GenAI Streamlines Fraud Investigations

GenAI stands out as a game-changing tool in the fight against fraud, and businesses are quickly recognizing its value. Over the next 2 years, the use of AI and ML technologies in anti-fraud programs will increase threefold, and 59% of businesses plan to boost anti-fraud tech budgets. By leveraging advanced algorithms, GenAI offers a powerful set of capabilities to help businesses fight fraud faster.

1. Efficiently Conduct Investigations

Generative AI automates open-source research, gathering comprehensive information on entities and counterparties from various sources like social media, news, and corporate registries, revealing suspicious relationships. By reducing manual effort and identifying fraudulent patterns, AI enhances investigation accuracy. Investigators can focus on higher-level analytical tasks and decision-making, improving overall investigative efficiency and minimizing human error.

2. Streamline Adverse Media Searches

GenAI-driven solutions expedite adverse media screening by automating the identification and collection of negative reports from multiple sources. Traditional methods are time-consuming and prone to errors, but AI can continuously monitor and analyze news websites, blogs, and social media for negative mentions of entities. This rapid risk identification ensures organizations are promptly alerted to relevant issues, enabling quick assessment and response to emerging threats.

3. Generate Concise Summaries

GenAI-based investigative tools excel at generating detailed yet concise research summaries, distilling vast amounts of data into key findings and potential risks. This clear, succinct format enables investigators to quickly comprehend essential information and make informed decisions without being bogged down by unnecessary details. By presenting relevant information efficiently, AI enhances both the quality and efficiency of decision-making, expediting the investigation process.

4. Maintain Thorough Documentation

GenAI solutions meticulously document all research activities with proper citations, creating a comprehensive and auditable history of the investigation. This thorough documentation supports compliance and transparency requirements by detailing how conclusions were reached, and which sources were consulted. By maintaining detailed logs of all actions and data accessed, AI tools help organizations meet regulatory requirements and facilitate audits. This comprehensive documentation also supports internal reviews and defends the investigation’s findings in legal or regulatory proceedings.

All four capabilities are offered in Orion Innovation’s Payment Reimagine solution. This advanced solution provides cutting-edge anti-money laundering (AML) and fraud investigation capabilities.

Fight Fraud with Generative AI

Generative AI is revolutionizing fraud investigations in financial services, equipping financial institutions with powerful tools to combat increasingly sophisticated tactics. By automating research, expediting adverse media searches, and providing detailed summaries, GenAI significantly reduces manual effort and improves accuracy. These capabilities allow businesses to focus on higher-value activities and gain deeper insights into intricate financial crime patterns.

As more and more financial institutions integrate this transformative technology into their anti-fraud strategies, they not only strengthen their defenses but also forge a path toward a more secure financial environment.

Orion has been helping Financial Services companies rethink, reimagine, and reinvent their business. Learn more about our financial services expertise.

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