AI geared to protect banks against fraud

Artificial intelligence is on track to revolutionise every level of society, including banking — from addressing the issue of fraud and scams to improving efficiencies and delivering better customer experiences.

Speaking at the AI conference H2O World, the Commonwealth Bank’s Dr Andrew McMullan explained how the bank was leveraging AI to improve customer experience and prevent fraud.

The banking sector has long embraced AI through features that help customers save money and manage their finances better.

Mr McMullan said in many instances, the bank is able to solve complex problems because of AI, in ways that are more sophisticated and effective than we were previously able with humans alone.

For example, the AI-driven capability to analyse millions of customer documents, which would be an immensely time-intensive task for a human.

“But AI can rapidly read even hard-to-read documents and ultimately provide an easier, faster and more accurate experience for customers,” Mr McMullan said.

Protections against fraud

In addition, given the growing cyber threat to the financial sector, on the back of several breaches, AI has the capacity to assist banks by identifying and preventing fraud.

The recent cyber attack on non-bank lender Latitude Financial Group resulted in approximately 7.9 million driver’s licence numbers and 53,000 passport numbers being stolen from Latitude’s customers, sparking widespread concern across the banking sector. 

CBA is already using AI to detect and prevent fraud in real time with initiatives like NameCheck, which indicates whether customers are transferring money to the person they think they’re transferring to; and CallerCheck, which uses the CommBank app to verify that it’s a genuine employee of the bank contacting them by phone.

It has also recently announced the piloted Scam Indicator, in partnership with Telstra, which is hoped to protect Commonwealth Bank and Telstra customers from phone scams.

The Scam Indicator is designed to spot certain high-risk scam situations in real time utilising a Telstra API (application programming interface) that CBA will use as part of the scam detection process.

Mr McMullan said these initiatives build on a suite of recent announcements from the bank aimed at using AI to help protect customers from scams, including behavioural security technology announced last year designed to detect suspicious and unusual behaviour.

Despite the advantages, Mr McMullan said AI cannot replace human intervention and judgement, instead will work hand in hand.

“Human intervention and judgement are needed — clearly creativity, intuition and experience still play a really important role,” Mr McMullan said.

[Related: Banks launch scam awareness campaign]