How can new technology and AI help the financial industry and consumers all around the world?
Payments giant Visa has applied artificial intelligence algorithms to the surging number of global e-commerce transactions it processes each year, and said the tech smarts have helped it reduce fraud-based losses to financial institutions by $US25 billion ($36.4 billion) in the last year.
Online payment fraud, or “card-not-present” fraud, occurs most commonly with the use of stolen card details and, according to Australian Payment Network’s most recent report, accounted for 85 per cent of the total $561 million dollars worth of fraudulent transactions from Australian cards in 2017.
The problem impacts Australian banks as they often have to swallow the cost and refund customers for fraudulent purchases made with their accounts.
Visa’s Asia-Pacific head of risk, Joe Cunningham, said the vast majority of fraud on payments cards worldwide was now taking place in e-commerce, and that applying AI to analyse more than 127 billion annual transactions meant suspicious transactions could be identified in real time.
“It is one of the earliest implementations of a neural network-based artificial intelligence [applications] in the world, apart from the military,” Mr Cunningham said.
“If you take all the transactions that we help our clients identify as fraudulent, that comes to dollar figure of approximately $25 billion [USD] a year.”
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