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Risk-management technology provider Feedzai has harnessed artificial intelligence with the introduction of Railgun, its latest fraud-detection engine.
What differentiates Railgun, according to Feedzai, is that it taps real-time data such as customer behavior patterns and the use of specific cards across merchant networks over longer periods of time. As a result, the technology can analyze larger amounts of data than standard engines that don’t leverage artificial intelligence. It can also put that data into a more definitive context for accurately detecting suspicious transactions, Feedzai says.
Feedzai also claims Railgun updates its data faster than competing fraud-detection engines. This matters because it reduces data latency and enables emerging fraud patterns to be spotted sooner, according to the company.
As a result, financial institutions can speed implementation of risk-strategy updates and new fraud-detection rules, reducing the risk of any lag in fraud-detection decisions and also reducing the pressure on data-science teams to keep up with rapidly changing fraud patterns, the company adds.
Faster fraud detection is becoming critical, with 71% of financial institutions having reported an increase in consumer-account takeover fraud using real-time payment networks from 2021 to 2022, according to Datos Insights, formerly Aite-Novarica Group.
Controversy surrounds the use of AI in some industries as it poses the risk of displacing humans from the decision-making process, but payment processors and financial-service providers are finding it to be a useful tool for fraud detection. Jack Henry & Associates, for example, uses AI for real-time fraud detection.
“As technology continues to evolve and tools such as AI become more readily accessible, fraud-detection systems need to be able to keep pace and reliably combat criminal activity,” Pedro Barata, chief product officer for Feedzai, says in a statement. “Railgun is a … weapon in the fight against financial crime, allowing banks and other financial institutions to accurately and cost-effectively turn the tide on the rising levels of fraud. With Railgun, banks no longer have to make assumptions or generalizations when it comes to risk profiling.”
