iovation Study Finds 68% of North American Financial Institutions Plan to Invest in Machine Learning to Help Combat Fraud - Seite 2

"Hackers see FIs as the perfect target for fraud. And, if you pile on the intense pressure to make the banking experience easier and more frictionless for customers it's clear that FIs need a solution that will make significant improvements to their fraud fighting approach," said Eddie Glenn, Product Marketing Manager for iovation. "We are seeing FIs turn to machine learning analytics as the foundation for a broader solution. Leveraging the vast amount of customer data at their disposal and applying advanced, machine learning techniques, FIs can create insights that allow them to better predict new fraud types they have not seen before as well as implement more contextual authentication measures that can understand the relative risk of a given transaction to ensure a more seamless experience for retail bank consumers."

One of the misconceptions about machine learning is the perception that 'unsupervised models" in which sophisticated algorithms alone will become the prevalent model to identify and reduce FI's exposure to fraud will be the ultimate arbiter of whether a transaction is potentially fraudulent. However, according to the report, the majority of the installations of ML among the FIs interviewed use some type of combination of scoring generated by ML and highly trained fraud experts to continually refine and improve their models. In fact, fifty percent of respondents are using entirely supervised techniques or primarily supervised. While unsupervised models might be the goal in the long term, supervised and semi-supervised models in which trained fraud experts provide input to better train and fine tune their ML models are critical to creating a fraud prevention system that can proactively identify fraudulent activity while reducing the incidence of false positives that can negatively impact the customer experience.

The report was compiled from interviews with 28 senior fraud and data analytics executives at 20 different North American financial institutions. These interviews were conducted by Aite and took place during August and September 2017. To access the full Machine Learning: Fraud is Now a Competitive Issue report, please visit: https://www.iovation.com/resources/reports/machine-learning-fraud-is-now-a-competitive-issue

About iovation
Headquartered in Portland, OR, iovation was founded with a simple guiding mission: to make the Internet a safer place for people to conduct business. Since 2004, the company has been delivering against that goal, helping large brands protect their end users against online fraud and abuse that's increasingly more common in today's hacker culture. Using an intuitive and high availability product suite that focuses on authentication and fraud prevention, iovation identifies trustworthy customers through an advanced combination of device authentication and real-time risk evaluation. Armed with the world's largest device-based fraud prevention database, iovation safeguards tens of millions of transactions against fraudulent activities each day. And the world's foremost fraud experts regularly contribute their learnings as members of iovation's Fraud Force Community, an exclusive virtual crime-fighting network.

About Aite Group
Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, Aite Group guides financial institutions, technology providers, and consulting firms worldwide. Visit them on the web and connect on Twitter and LinkedIn.

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Jennifer Lyle
Barokas Public Relations for iovation
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