Japan’s Financial Sector Turns to AI-Driven Fraud Detection Solution
In a bid to combat increasingly sophisticated financial crimes, Chiba Bank, Ltd., one of Japan’s leading regional banks, has partnered with cybersecurity firm LAC Co., Ltd. to deploy an artificial intelligence (AI) based fraud detection solution called “AI Zero Fraud.”
Rising Threat of Financial Crime
Recent reports have highlighted the alarming rise in financial crimes in Japan. Special fraud schemes, including those targeting elderly individuals, resulted in a staggering ¥37 billion in losses in 2022. Furthermore, fraudulent internet banking transactions reached an unprecedented ¥3 billion in the first half of 2023 alone. The number of fraudulent accounts used by criminals to hold stolen funds has also surged, posing a significant threat to Japan’s financial sector.
AI-Driven Fraud Detection Solution
Chiba Bank will utilize LAC’s AI-driven solution, which analyzes and evaluates transaction risk based on criminal activity characteristics. The system was validated through a proof-of-concept experiment, demonstrating high accuracy in detecting fraudulent transactions and accounts in specific fraud cases.
Key Features of the “AI Zero Fraud” Solution:
- Analyzes transaction behavior to detect financial crimes with high accuracy
- Assists financial service providers in preventing losses from fraudulent internet banking transactions and ATM-based frauds
- Enhances the ability to detect suspicious transactions and prevent financial losses
Traditional Rule-Based Systems vs. AI-Driven Solutions
Traditional rule-based fraud detection systems struggle with complex scenarios, whereas AI-based mechanisms can analyze more nuanced aspects of transaction behavior, enabling highly accurate detection of increasingly sophisticated financial crime methods.
Benefits of AI-Driven Fraud Detection:
- High accuracy in detecting fraudulent transactions and accounts
- Improved ability to detect suspicious transactions and prevent financial losses
- Enhanced security for financial institutions and their customers
Partnership between LAC and Chiba Bank
The partnership between LAC Co., Ltd. and Chiba Bank, Ltd. marks an important step towards enhancing the security of Japan’s financial sector, which has been under increasing pressure from sophisticated fraud schemes.
About LAC Co., Ltd.:
- Leader in cybersecurity and systems integration
- Provides services that address various societal and business challenges
About Chiba Bank, Ltd.:
- One of Japan’s top regional banks with a strong network of 181 domestic branches and six international locations
The “AI Zero Fraud” solution is expected to improve Chiba Bank’s ability to detect suspicious transactions and prevent financial losses. This partnership demonstrates the growing importance of AI-driven solutions in the fight against financial crime, and LAC Co., Ltd.’s commitment to supporting the security of Japan’s financial sector.