Visa Uses AI to Prevent $40 Billion in Fraud: How Machine Learning is Combating the Surge in Cybercrime and AI-Enabled Fraud – Visa (NYSE:V)

Visa Inc. Five Company executives say the company has used artificial intelligence and machine learning to stop $40 billion worth of fraud.

what happened: James MirfinVisa's global head of risk and identity solutions told CNBC that the company is using AI and machine learning to combat fraud, which has nearly doubled from the previous year.

Visa managed to stop $40 billion worth of fraudulent activity from October 2022 to September 2023, Mirfin said, nearly double the amount from the previous year.

He explained that fraudsters are using AI to generate Primary Account Numbers (PANs) and then repeatedly testing them, a technique known as an enumeration attack, which costs fraud losses $1.1 billion a year.

“We look at over 500 different attributes. [each] “It scores the transactions and creates a score, and that's the AI ​​model that actually does that. We process about 300 billion transactions a year,” Mirfin told CNBC.

Visa assigns each transaction a real-time risk score to detect and prevent enumeration attacks in transactions processed remotely without a physical card via a card reader or terminal.

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“All of them [transactions] “It's being handled by AI. It's looking at a variety of attributes and evaluating every transaction,” Mirfin said.

Visa also uses AI to assess potential fraud for token provisioning requests, and has invested $10 billion over the past five years in technology to reduce fraud and strengthen network security.

Why is this important?The significance of Visa's work in preventing $40 billion in fraudulent transactions is underscored by the surge in cybercrime. Charles LoboAccording to Visa's head of risk management for Central and Eastern Europe, the Middle East and Africa, cybercrime is predicted to rival the size of the world's top economies by 2025, costing the country $10.5 trillion per year.

Additionally, the use of AI-generated fake identities to circumvent know-your-customer (KYC) checks at cryptocurrency exchanges is also a widespread issue. Only FakeAlthough it is an online service, it creates fake identities to pass KYC checks, raising serious security concerns.

Additionally, the use of deepfake technology to commit fraud has also been on the rise: In one case, a Hong Kong police report said, a fraudster used deepfake technology to impersonate a company's CFO during a video call, resulting in a $25 million loss.

Additionally, the Hong Kong Securities and Futures Commission recently warned about a fraudulent cryptocurrency trading platform called “Quantum AI,” which was using a deepfake of Elon Musk to lure victims, highlighting the growing use of AI in fraudulent activities, especially in Asia.

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This story was written and edited with Benzinga Neuro. Kaustubh Bagalkote