Fraud Detection and Prevention Using Machine Learning Algorithms: A Review

Digital Fraud has become a threat across all the sectors. Its pivotal for any organization now to have a dedicated focus to detect and prevent fraud and increase their focus on Security. Digitization has revolutionized the way we perform our day to day transactions with a click of a button. On the flip slide, it has also opened up threats through bad actors who can misuse the missing controls in digital apps and thereby impersonate themselves as real customers and perform costly transactions on their behalf resulting in financial losses. Organizations will have to pay attention as it also impacts its brand value. Organizations have learnt their lessons from the past to detect the fraudulent activities in real time by using multitude of factors like using complex algorithms trying to detect fraud patterns. However, fraudsters are also getting intelligent day by day and it requires continuous focus to prevent frauds and to stay ahead of the fraudsters. It is important to monitor key patterns that might help differentiate a real vs fraud transaction. Capturing Customer information like Geo location, authentication, session, device IP address can be maintained. Machine Learning and application of Artificial Intelligence will play an important part in learning and detecting fraud patterns automatically.