$Visa (V.US)$ has successfully leveraged artificial intelligence and machine learning to prevent $40 billion in fraudulent activities, according to a company executive.
What Happened: James Mirfin, global head of risk and identity solutions at Visa, informed CNBC that the company has utilized AI and machine learning to combat fraudulent activities, which have nearly doubled from the previous year.
Visa has managed to prevent $40 billion in fraudulent activities from October 2022 to September 2023, which is almost twice the amount from the previous year, Mirfin said.
He explained that fraudsters use AI to generate primary account numbers (PAN) and repeatedly test them. This method, known as an enumeration attack, results in $1.1 billion in fraud losses annually.
"We look at over 500 different attributes around [each] transaction, we score that and we create a score –that's an AI model that will actually do that. We do about 300 billion transactions a year," Mirfin told CNBC.
Visa assigns a real-time risk score to each transaction to detect and prevent enumeration attacks in transactions processed remotely without a physical card via a card reader or terminal.
"Every single one of those [transactions] has been processed by AI. It's looking at a range of different attributes and we're evaluating every single transaction," Mirfin said.
Visa also uses AI to assess the likelihood of fraud for token provisioning requests and has invested $10 billion in technology to reduce fraud and increase network security over the last five years.
Why It Matters: The significance of Visa's achievement in preventing $40 billion in fraudulent transactions is underscored by the alarming rise in cybercrime. According to Charles Lobo, Visa's Regional Risk Officer for Central and Eastern Europe, Middle East, and Africa, cybercrime could rival the world's top economies by 2025, with projected costs reaching $10.5 trillion annually.
Additionally, the use of AI-generated fake IDs to bypass Know Your Customer (KYC) checks on cryptocurrency exchanges has become a widespread issue. OnlyFake, an online service, has been creating counterfeit IDs that successfully pass KYC checks, raising significant security concerns.
Moreover, the use of deepfake technology in scams is on the rise. In one instance, fraudsters used deepfake technology to impersonate a company's CFO during a video call, resulting in a $25 million loss, as reported by Hong Kong police.
Furthermore, the Hong Kong Securities and Futures Commission recently warned about a fraudulent cryptocurrency trading platform called "Quantum AI," which used deepfakes of Elon Musk to lure victims, highlighting the growing use of AI in committing fraud, particularly in Asia.
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote