AI Helps Banks Detect Fraud Faster

Banks are turning to advanced AI technology to stop fraudsters in real-time, using machine learning to analyse vast amounts of data. With scammers becoming more sophisticated, AI helps financial institutions identify unusual transactions quicker than ever - sometimes detecting fraud based on how a user interacts with their device.

Banks have always focused on fraud prevention, but the rise of deepfake scams and cybercrime has made real-time detection more crucial. In a high-profile case from December 2024, fraudsters used AI-generated deepfakes in a video call to trick an employee into transferring $25.6 million. Scenarios like this highlight the need for advanced security measures.

One major bank processes 35 million events daily, from logins to financial transactions, searching for anomalies. AI enables fraud teams to spot suspicious activity instantly, rather than spending weeks analysing data manually. The technology is transforming fraud prevention by learning from millions of data points, evolving with new scam techniques, and identifying patterns no human could detect alone.

Beyond fraud detection, AI is improving banking operations overall. Some banks report a 50% drop in customer scam losses, thanks to AI-powered alerts and messaging systems. Others have cut call centre wait times by 40% by automating security checks. AI’s predictive capabilities also flag unusual spending patterns, helping protect customers before fraud occurs.

While AI is evolving rapidly, its effectiveness depends on high-quality data and industry collaboration. Banks worldwide are working together, sharing insights to stay ahead of criminals. AI has huge potential, but it must be implemented responsibly to maximise security while protecting user privacy.

Source: Australian Financial Review, RemBrandtAI, Fintech Futures