Experts from across the globe gathered at The Venetian in Las Vegas for Money 20/20, to discuss financial fraud and the future of the payments industry. Forter's CEO, Michael Reitblat, spoke at the event, addressing the importance of Artificial Intelligence (AI) and the role it plays in streamlining fraud prevention for payments companies, banks, and financial institutions, and how it should be leveraged in the future.
Michael began the talk by breaking down the common misconceptions of AI stating that, "When people talk about AI, they don't really mean AI, they mean a specific use of Machine Learning (ML). Most of that, at least from what I've seen, is not even that, it's a basic decision tree, and it's basically code for automation." The term “AI” is often loosely applied to the act of a machine doing something multiple times, with companies aiming to capitalize on the trendy term and concept.
Abuse of the term “AI” is ubiquitous within the payments industry and therefore the meaning of the term itself is misinterpreted. The connotation is that machines are processing information incredibly fast and mimicking human understanding. However, the truth of the matter is that machines do not actually understand the data they see. Instead, at the very core of the intended use of this term, is the concept of ML, wherein machines are able to quickly identify patterns amid massive amounts of data, (a task that would be too onerous for human capabilities), as they relate only to a very specific task.
Michael continues by speaking about the trajectory of AI as it can, and should be applied to financial institutions. He emphasizes that the fallacy of AI is that it will immediately solve all fraud problems, when really the application of the technology is far more complicated. AI is powerful but can only render results as good as the data fed or taught to the models. Furthermore, a more effective means of solving the fraud problem through the application of AI, may actually be to identify good transactions and users on your platform rather than attempting to identify fraud. Fraud cases can vary enormously, so looking for corroborating patterns of positive customer activity will make for more accurate and effective models.
Watch Michael’s talk below for further insights regarding where AI in the payments industry is and should be heading.