Financial Fraud Detection Methods in Japan Get a Boost with AI-Powered Solution
Combating Sophisticated Financial Frauds with Artificial Intelligence
Chiba Bank, Ltd., has partnered with LAC Co., Ltd., to deploy an artificial intelligence (AI) based fraud detection solution called “AI Zero Fraud”. This system is designed to detect fraudulent transactions and accounts with high accuracy, helping the bank prevent losses from financial crimes.
The Growing Threat of Financial Frauds in Japan
According to recent statistics, special fraud schemes have become increasingly prevalent in Japan, resulting in total losses reaching approximately ¥37 billion in 2022. Moreover, fraudulent internet banking transactions have surged, totaling about ¥3 billion in the first half of this year. The number of fraudulent accounts used by criminals has also seen a significant increase.
Improving Detection of Suspicious Transactions
To combat these threats, Chiba Bank is committed to improving its detection of suspicious transactions. The bank will utilize LAC’s AI-driven solution, which analyzes and evaluates the risk of transactions based on the characteristics of criminal activities. The effectiveness of “AI Zero Fraud” was validated through a Proof of Concept (PoC) experiment, demonstrating high accuracy in detecting fraudulent transactions and accounts.
How AI-Driven Detection Works
The system uses artificial intelligence to analyze transaction behavior and detect financial crimes with high accuracy. It assists financial service providers in preventing losses from financial crimes such as:
- Fraudulent internet banking transactions
- Specialized ATM-based frauds
- Detection and identification of fraudulent accounts used to transfer illicit funds acquired by criminals
Advantages Over Traditional Methods
Traditional fraud detection systems rely on rules to detect specific user behaviors, but struggle with complex scenarios. In contrast, AI-based detection mechanisms involve learning transaction characteristics and analyzing behavior to detect suspected fraud. This enables highly accurate detection of increasingly sophisticated financial crime methods.
A Significant Step Towards Enhancing Financial Fraud Detection Capabilities in Japan
The partnership between Chiba Bank and LAC is a significant step towards enhancing financial fraud detection capabilities in Japan. The implementation of “AI Zero Fraud” will support the bank’s efforts to combat special fraud and manage fraudulent accounts, ultimately protecting customers from financial crimes.
Conclusion
With the increasing prevalence of sophisticated financial fraus in Japan, the deployment of AI-powered fraud detection solutions like “AI Zero Fraud” is crucial for preventing losses and protecting customers. The partnership between Chiba Bank and LAC showcases the potential of AI-driven detection to improve financial fraud prevention and management in Japan.