A sophisticated tool for risk management powered by AI, Feedzai aids in the identification of fraud at the institutional level . Financial fraud is on the rise, with losses of $8.8 billion in 2022 alone. Financial fraud damages rose by 30% between 2021 and 2023, according to the US Federal Trade Commission. Scammers are already using generative artificial intelligence (AI) to create increasingly complicated and realistic frauds, which provides a bleak picture of the shadowy side of technological innovation.
According to numerous studies, fraudsters are able to send complex phishing emails, build malware, create chatbots that resemble human dialogue, ask for sensitive financial information, and even imitate real voices. The instantaneity of immediate payments through digital banking also gives fraudsters the chance to trick customers into moving money instantly, leaving scammed users with little to no chance of recovering their money.
Platforms for risk management like Feedzai are a component of the continuous struggle against financial crime. Platforms like these, which use machine learning and big data to fight sophisticated financial scams, tout cutting-edge technology and high levels of protection.
In this article we’ll discuss how Feedzai operates, purpose of Feedzai, and features of Feedzai
How does the Feedzai system operate?
With the aid of artificial intelligence (AI) and machine learning, the Feedzai risk operations (RiskOps) platform offers fraud prevention services to merchants, banks, and payment processors. With a global audience, the site works to safeguard users against the dangers of online banking and shopping.
Feedzai, a company that was first established in Portugal in 2011, is currently headquartered in California and provides services in 190 countries. The business was initially created by its founders, Nuno Sebastio, Paulo Marques, and Pedro Bizarro, to provide operational intelligence and fraud detection solutions. It is now regarded as a market leader in its industry.
Currently, Feedzai is a collection of AI-based products that are aimed solely at identifying fraud and combating financial crime. Established banks and financial organisations including Citibank, Standard Chartered, and Lloyds Banking Group are among Feedzai’s principal customers.
What is the purpose of Feedzai?
Feedzai assists in addressing a number of threats and weaknesses, including:
1.Addressing the flaws in legacy systems: Financial organisations frequently employ a number of obsolete point solutions that do not particularly target scams but instead utilise rules-based approaches to detect fraud. Three significant drawbacks exist with traditional methods. They are prone to fraud schemes that extend across different financial products or payment platforms since they are first limited to walled channels.
Also, older systems identify fraud by examining either behavioural activity (such as patterns of app and device usage, malware incidence, biometrics, and network activity) or financial activity (transactional data across banking platforms). Their study, however, does not combine the two forms of activity, which makes it harder to spot a scam that is still active.
2. Combating the establishment of phoney accounts in order to increase incentives: Consumers and businesses have benefited more from the growth of digital transactions, especially for minor but regular purchases. On the other hand, this expansion offers scammers a chance to abuse the rewards system.By setting up phoney accounts and moving money around in loops to obtain incentives, fraudsters are leveraging the move towards cashless transactions and more gamification. Identifying hidden fraudulent payment networks by analysing network transactions made by account holders is Feedzai’s area of expertise. They can now identify false patterns that might not be immediately apparent.
3.Identifying SIM swaps: SIM switching is a form of fraud where a criminal pretends to be the owner of a phone number and persuades a call centre agent or branch staff to switch out the SIM card that goes with it. The victim’s personal information is given to the carrier in order to accomplish this.
Fraudsters either use information that users have voluntarily shared in the public on social media platforms or they steal it through hacks and data breaches. They utilise this information to trick carriers into letting them swap out the SIM card associated with a phone number for a SIM card they already own. All incoming calls and text messages are forwarded to the fraudster in this way.
What distinguishes Feedzai from other apps?
In order to enhance the platform’s capacity to recognise and stop scams before they cause damage to clients, Feedzai has incorporated additional ScamProtect elements to its RiskOps strategy. Key elements of the platform that help prevent fraud include:
1. Detailed RiskOps architecture: A single centralised site for data ingestion and interpretation is provided by Feedzai, which functions in real time. With the help of its thorough architecture, institutions now have a central location to monitor new fraud concerns, discover brand-new business needs, and analyse operational efficiency. Banks can use Feedzai to forecast where their attention should be in advance of trends.
2.education and early intervention: With the help of Feedzai’s early detection features, banks can recognise digital signals like behaviour biometrics and other non-transactional patterns that may point to a prospective scam victim. As a result, the banks may be able to act and inform clients earlier in the risk lifecycle, before they make a payment. Alerts can record particular signs and in-depth justifications to help users manage the complexities of scam fraud. Agents can then use this information to direct them in having more fruitful conversations with consumers.
3.AI that prioritises people: Customers can occasionally face additional obstacles as a result of technology because they are seen as data points. Bank customers may experience unneeded difficulties (cancelled transactions, persistent calls to confirm their purchases, etc.) as a result of this and unfair grouping into categories.
To solve this problem, Feedzai employs multidimensional data and AI to prioritise clients. Banks can identify changes and prevent financial crime with increased simplicity and consumer satisfaction by developing hyper-accurate risk profiles based on individual behaviours.
4.Checking incoming payments: Sending the money to a controlled account is necessary for a scammer to be successful. However, thanks to Feedzai, banks can now keep an eye on both incoming and outgoing money, providing them additional opportunities to foil a hoax.
5.Triage behaviour warnings: As each user is continuously monitored by the network, intelligence is gathered to immediately spot fraudulent behaviour. Key individuals are then given the opportunity to immediately respond to alarms, automate procedures, and coordinate team workloads using Feedzai Case Manager.
Based on the agent groups’ training and role and queue management, the platform can send particular notifications to those groups. The software also features dashboards and statistics that classify fraud categories, making it easy to track fraud detection and alert management.
Future predictions indicate that risk operations made possible by AI will rise dramatically. Predictive analytics and cutting-edge machine learning algorithms will revolutionise risk assessment, detection, and mitigation across industries.
In conclusion, AI will quickly analyse massive data sets to find complicated patterns and abnormalities, enabling proactive risk management. Real-time monitoring and adaptive algorithms will increase response quickness while lowering vulnerabilities. Knowledge of risk, including social and reputational variables, will be improved via sentiment analysis and natural language processing.
Additionally, decision-making will be optimised through joint AI-human workflows, and AI’s self-learning capabilities will allow it to continuously adjust to changing threats. AI-driven risk operations will eventually usher in a period of precision, efficiency, and resilience, reducing dangers and encouraging safer, more secure workplaces.