The team at ai have been in the world of fraud prevention for many years and have learnt that it is not just technological that counts but how the technology is used.
We, like many other fraud technology providers have state of the art solutions but we have approached the problem in a slightly different way. Our focus is helping our clients be more efficient and to use the technology more effectively. To do this, you have to clearly understand the process of fraud management and the science of behavioural economics.
Behavioural economics is the field associated with human decision. Either conscious or unconscious, big or small, about our lives and what we buy and do, the context, framework, interface, medium and pathways through which we reach decisions may have a greater influence on the decisions we take than the long-term consequences of the decision.
For this reason, the ai design principals are based around providing self-service, highly automated tools utilising the latest machine learning technology and techniques – making it as easy as possible for fraud teams to detect and prevent fraud efficiently and effectively day in and day out and able to respond quickly to ever changing fraud patterns without the need for 3rd party vendor involvement. A modern day fraud team simply cannot afford to wait for a 3rd party to develop a fraud model or deploy hard coded rules – the millennial fraudsters are too sophisticated, they won’t wait! The fraud manager of today must be empowered to detect new fraud patterns and build and deploy new fraud models the same day thus minimising the fraud exposure and not inadvertently impacting the honest consumer experience with draconian interim rule sets.
The other key issue that no one speaks about is the pressure on the fraud teams and what can be done to mitigate the impact of the 15 or so human biases that can affect the efficiency of the fraud team. Examples of human biases include inattentional blindness, group think, social loafing, not invented here and decision fatigue.
Decision fatigue refers to the deteriorating quality of decisions made by an individual, after a long session of decision making. It is now understood as one of the causes of irrational trade-offs in decision making. For instance, a study has judges in court have been shown to make less favourable decisions later in the day than early in the day.
ai has evidenced decision fatigue as part of client bench marking analysis work where we found the following work profile in the fraud teams.
Simply put, team members run out of energy just before lunch and at the end of the day, and our decision making ability especially in a repetitive environment becomes impaired and potentially substandard. The situation can be further exacerbated at the end of the working week when staff are simply in the ‘go home for the weekend’ mode, just when fraudsters tend to be getting more active.
It is not just that humans are poor at this stuff it is that the human brain has:
- In-built biases and fallibilities that make it ill-equipped for fraud-related decision-making- Barely changed since mankind’s ancestral environment c.100k years ago- Been wired to conserve energy, avoid effort & risk and seek instant gratification.
Known and scientifically verified, cognitive shortcomings include:
Once these situations are understood and recognised education and working environment change programmes can be put in place to harness the best abilities of both human and machine.
In other words, we believe some jobs are best done by machines, leaving more complex decisions and creative working to humans. There are there two things you need to consider and understand:
1. How to manage around these cognitive short comings and develop a programme that will provide immediate benefits for your teams.2. What tools would complement the existing environment both in terms of technology and human resource to help automate many of the day to day activities and free up the fraud team to focus on activities more suited to them
It is the ai mantra to ‘automate tedious routines to release human creativity’ and it fully aligns with the mounting scientific evidence presented in the field of behavioural economics. Our Smart suite of products and services have been developed to complement existing fraud systems and to release the fraud team to work on those more creative aspects of fraud management, focussing more on insight and strategy and not being hampered with day to day repetitive operational management.
We should let the human brain do what it is good at, and let computers do what they are good at - marrying the two is a powerful thing.“- Dr Robert Frey Professor State University of NY & former MD Renaissance Technologies
About Mark Goldspink
Mark has spent 25 years in general management roles. Mark joined The ai Corporation (ai) in 2013 to work with Ashley Head on developing and expanding a whole series of inter-related payment businesses globally, but with main focused on ai.
About ai
ai provides fraud prevention solutions to some of the world’s largest financial institutions, merchants and PSP’s. Our unique self-service solutions, including our new ‘state-of-the-art neural technology, protect and enrich payments experiences for more than 100 banks, 3 million multichannel merchants monitoring over 20 billion transactions a year. For more information about ai, please check out a detailed profile of this company in our dedicated, industry-specific online company database.
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