AI: Friend or Foe
AI in Fraud and Payments: Friend or Foe?
Let’s step into the future of finance, where every digital transaction is backed by artificial intelligence. Today in the world of payments, AI isn’t just a another tool in our box of tricks, it can be a game-changer. It promises fast transactions, unmatched fraud detection, and strong identity checks. But with great power comes great responsibility: as we embrace these cutting-edge solutions, the big question emerges, will AI be our greatest ally or our trickiest opponent in the drive for safe, seamless payments?
So, let me put forward the case for AI as a friend:
AI isn’t just smart, in fact if AI was a team mate we would describe them as a genius! It can scan thousands of payments in a nano seconds and spot anything fishy before it becomes a big problem.
When it comes to proving who you are, AI’s got some ingenious tricks: it can check faces, how you type, or even the device you’re using, making it a lot harder for the bad guys to sneak in.
And the best part is AI keeps learning from every transaction, so it gets better and better at stopping fraudsters who are always seemingly ahead .
And for everyday customers, this means less friction and a smoother, faster experience when you buy online.
I would say that is not too shabby!
Where there is good, bad sometimes follows—the case for AI as a potential foe:
Hidden Bias: AI learns from old data, and if that data’s got baggage, it can end up making the same mistakes, like blocking the wrong people or leaving genuine customers frustrated and shopping somewhere else.
Being in the dark: Sometimes, AI just churns out a decision without showing the reason behind it. If someone gets blocked or flagged, it’s tough to know why, therefore overturning the decision with confidence could be tricky.
Misdirection: As AI gets smarter, so do the fraudsters behind the scenes. With deepfake videos, fake voices, and doctored documents, it’s getting harder to tell what’s real and what’s not.
David vs. Goliath: Big banks and tech giants can afford to invest in really smart AI, but smaller businesses might get left behind, making things a bit uneven in the fight against fraud.
Identity Authentication: Knowing when it’s real and spotting when it’s not:
Let’s face it, proving who’s who online keeps getting trickier. AI is pretty good at spotting the fakes, but the bad actors are keeping up too, using everything from deepfake faces to (and I hate to say it) some very clever scams. So, what can we do? I have said so many times that there is no miracle tool or strategy which will fix everything, so we need to layer up! The best defences mix AI with the likes of two-factor authentication, device checks, and when all else fails, a real person taking a look!
But don’t just check once and call it good for ever. The smartest systems keep tracking things as you go, watching for behaviour changes and raising a flag if something looks off.
Finally, we want to know why we were blocked or flagged. AI can’t just make decisions in ‘secret’, we need to be clear on the reasons so everyone can trust in what AI can do.
Friend, Foe, or Both? It’s just my opinion of course!
In the end, the answer is not that simple. AI’s impact depends on how it is shaped, governed, and integrated within the broader payments ecosystem. The future belongs to those who are able to harness its strength while respecting its limits, ensuring that in the ongoing battle for authenticity and trust, the focus remains on progress.
AI can be your best friend or your biggest headache when it comes to fighting fraud. If we use it the right way, with clear rules, it helps us spot trouble, keep our customers safe, and make the checkout experience smoother. But if we become complacent or forget to double-check what it’s doing, that same tech can turn on us, making things riskier and reducing the trust of our customers.
Bottom line? AI isn’t good or bad on its own, it’s all in how we use it. The real winners are the ones who use AI’s power but know when to step in and keep it real. That’s how we make sure trust and progress stay front and centre in this digital world.
Mari-anne Bayliss
PNS Solutions – Payment Solutions, Fraud and Authentication Consultant