The best way to protect against vendor fraud is to have a robust checks-and-balances framework in place. That includes a set of internal controls that prevent employee collusion, as well as an external system that detects anomalous activities and flags them for further review. But even with the best technology in place, it’s still possible for bad actors to perpetrate a variety of different schemes. Those include identity theft, payment fraud, invoice fraud, business email compromise, romance scams, and purchase scams.
How to detect fraud using AI?
A vendor fraud prevention solution should provide real-time monitoring of transactions, customer behavior, and other system data to identify suspicious patterns or anomalies. Fraud prevention solution vendor should also have the ability to automatically surface critical information and recommend a course of action, saving time and resources for fraud analysts.
Ensure that the fraud prevention software offers flexible rules and risk thresholds to match your bank’s unique needs. Avoid a one-size-fits-all approach that either misses fraudsters or creates friction for trusted customers.
Choose a solution that supports a broad range of transaction types and channels, including mobile and online. It should support both the use of machine learning and the creation of custom rules to help you identify anomalous transactions. The best solutions have a low false positive rate, and some offer the option of automating fraud reviews to reduce manual labor.
Look for a provider that has a wide array of tools to detect fraud and other anomalies, such as digital footprint analysis, whitebox machine learning, and advanced API integration. Check that the platform supports various deployment models, such as SaaS or on-site installation. Ensure that the solution provides free support and documentation, and can be purchased without a long-term contract.