Visa stops $40B in fraud using AI

Much has been written about the threats posed by artificial intelligence, especially in terms of fraud. But here's a compelling bit of good news: Visa was able to prevent 80 million fraudulent transactions valued at $40 billion, globally, last year, thanks to its investments in artificial intelligence.

Charles Lobo, regional risk officer for Visa in Eastern Europe, the Middle East and Africa, revealed this in an interview with Reuters at a conference in South Africa, the news service reported.

Worldwide, Visa has invested more than $10 billion over the past five years in technologies, including $500 million in AI and data infrastructure to protect clients and customers from fraudulent activity, Lobo told Reuters.

In 2025, cybercrime, globally, is expected to reach $10.5 trillion, according to the research and publishing firm Cybersecurity Ventures. If that were a nation's gross domestic product, it would rank as the world's third largest economy, Lobo noted in his interview with Reuters.

U.S. consumers, alone, lost $8.8 billion to financial fraud in 2022, according to the Federal Trade Commission.

Acquirers are investing in AI

Visa is not alone in its embrace of AI and related technologies. Nearly half (47 percent) of acquirers surveyed in 2023 by Mastercard and Fintech Nexus are using AI for fraud detection. And a whopping 92 percent expect to make such investments over the next two to five years, according to AI perspectives: transaction fraud, a report detailing survey findings.

One big reason for the uptick in investments, the report suggested, is increased adoption of ecommerce.

"While rules-based solutions are still the most commonly used technology, when combined with AI their effectiveness is increased and the number of required rules is decreased," the report stated. "This results in simpler workflows and more efficient management. Fraud teams are freed up to investigate large cases and only conduct manual reviews for accuracy or to perform occasional audits."

Government uses AI to recover $375M

The federal government also uses AI to combat financial fraud—a strategy U.S. Treasury officials said they began to deploy during the pandemic. And in fiscal year 2023, which ended Sept. 30, 3023, Treasury was able to recover $375 million, largely through the use of AI.

And much of that money was tied to check fraud.

Check fraud has increased nationwide by 385 percent since the pandemic, the Treasury Department said. To address this, the department implemented enhanced processes using AI to mitigate check fraud in "near real time" to recover potentially fraudulent payments from financial institutions.

"We are using the latest technological advances to enhance our fraud detection processes, and AI has allowed us to expedite the detection of fraud and recovery of tax dollars," Deputy Secretary of Treasury Wally Adeyemo said in a statement earlier this year.

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