One of the main apprehensions with faster payments is the potential for faster fraud, but artificial intelligence could help mitigate these concerns.
A study from the Bank for International Settlements (BIS) and the Bank of England gauged AI’s ability to detect the sophisticated fraud activity perpetrated by cybercriminals.
The experiments were conducted in a simulation based on data gleaned from millions of bank accounts and transactions, designed to be indicative of real-time retail payments.
The study, dubbed Project Hertha, found that AI models are a valuable fraud detection tool, excelling at identifying novel patters of financial crime. BIS reported that AI was 26% more effective at detecting suspicious activity than traditional fraud defenses.
Additionally, AI analytics helped financial institutions uncover 12% more fraudulent accounts than they would have identified otherwise.
A Powerful Evolution
AI’s potency in fraud protection was underscored by separate data from FIS, where 78% of respondents reported that artificial intelligence has improved their company’s fraud detection and risk management strategies.
Nearly half of the business and tech leaders surveyed said they plan to increase their investment in AI over the next two years, with many indicating they intend to delegate more complex tasks to it.
One of the most powerful evolutions of artificial intelligence is agentic AI, where AI agents can handle many tasks autonomously. While AI agents have the potential to be a formidable tool against fraud, many experts increasingly view them as a double-edged sword.
Meanwhile, research from SailPoint found that 96% of tech professionals consider AI agents a growing security threat. Yet, nearly all respondents said they plan to expand their use of agentic AI in the coming year.
A Supplement, not a Solution
As organizations take steps toward incorporating AI, cybercriminals have already deployed both generative and agentic AI at scale, using them in fraud efforts ranging from deepfakes to ransomware attacks. One of the main reasons cybercriminals have gained such significant advantage is that they aren’t hindered by concerns around privacy or reputation.
While Project Hertha may be proof that AI is a powerful tool, there is still the chance that artificial intelligence models could make mistakes—either missing instances of fraud or generating false positives.
These limitations led BIS to conclude that AI tools should be seen as a supplement to fraud defenses, not a complete solution. Since organizations cannot fully rely on AI, they will need to think outside the box and innovate new approaches to keep pace with cybercriminals who have a substantial head start.
