Eight ways to combat fraud in the AI age

Organisations worldwide are facing an upsurge in fraud as clever criminals increasingly look to AI.

AI-driven technologies including deepfake software, automated phishing systems, chatbots, and advanced data analytics are aiding scammers in carrying out fraud quickly and easily.

This increases the pressure on organisations to safeguard their systems and customer data as they try to stay ahead of evolving threats.

The threat of AI is not only to their bottom line, but also their reputation, by eroding customer trust, as well as having a negative impact on their compliance efforts.

Eight approaches to combat fraud in the AI age:

1. Maintain high quality contact data: Always ensure customer contact data is accurate and up to date by using automated validation tools, as well as implementing regular data hygiene checks. This way you eradicate duplicates, goneaways, deceased and outdated records. Access to an accurate name, address, email and phone number makes the verification process more reliable. With this data ID verification technology can confidently cross-reference the provided information against official databases, or other authoritative sources, without discrepancies that could lead to false positives or negatives.
2. Confirm accurate address data: To prevent errors, detect fake data and ensure all address data is verified and up to date in real-time at the point of entry, use address verification and address lookup tools. Doing so accelerates the customer onboarding process, helping to deliver a standout customer experience. It’s also important to acknowledge that address verification - having a consistently accurate, standardised address - is commonly recognised as the foundation of contact data quality. Additionally, it’s much easier to match and verify identities across multiple sources once you have access to accurate customer addresses.
3. Leverage geocoding technologies: Enhance address data by using geocoding technology to pinpoint precise geographic locations. This supports the detection of mismatched or fraudulent addresses, and ensures more accurate risk assessments.
4. Enrich the electronic ID verification (eIDV) process: Employ multi-layered tools combining always on automated digital eIDV platforms with access to government, utility and credit agency databases, with document checks and biometrics. These provide accurate, instant fraud detection.
5. Scrutinise transactions with advanced analytics: Analyse transaction patterns and flag anomalies using AI-driven tools. As well as posing challenges for organisations in terms of driving fraud, AI can help prevent it. Also, use behavioural analytics to spot suspicious activities like unusual logins or rapid transactions.
6. Incorporate know your business (KYB) checks: Verify the legitimacy of the business entities you work with by undertaking background checks, validating company registration, ultimate beneficial owner (UBO) details, and financial history to prevent fraud.
7. Ensure compliance with local / sector regulations: Follow anti-money laundering (AML), know your customer (KYC) and GDPR regulations to bolster fraud defences and avoid penalties. Run regular audits to stay aligned with evolving requirements.
8. Partner with trusted technology providers: Work with reliable providers of ID verification and data quality solutions. Ideally ones that offer proven fraud prevention tools and comply with industry regulations.

As the use of AI by scammers is expected to grow in 2025, organisations must prioritise access to high-quality contact data and technology that delivers accurate identity verification. Doing so reduces the opportunity for fraud, fosters trust, ensures compliance, and provides a seamless, secure customer experience.

This guest blog was written by Barley Laing, the UK Managing Director at Melissa. To learn more about Melissa, please visit their LinkedIn  and Twitter page.

Authors

Barley Laing

UK Managing Director, Melissa

Barley Laing joined Melissa and set up the UK office in 2014 during an exciting expansion phase of the California headquartered company.

As Managing Director, with 27 years of technology and data industry experience, his role is focused on meeting the data quality and ID/compliance needs for organisations in the UK and worldwide.

The team that Barley heads up provides data consultancy, sales and technical support across their wide range of market leading web services, apps, SaaS and on-premise software solutions. These help organisations to deliver efficient multichannel customer engagement; onboarding; build customer loyalty; optimise organisational efficiency; and deliver data management and ID verification to meet Know your Customer (KYC), Know your Business (KYB) and Anti-Money Laundering (AML) requirements.

Under his leadership Melissa’s UK office has experienced double digit growth over the last six years, including 20% growth in 2022, and 25% in 2023. Over this period Barley has significantly grown the UK client base, which includes: ASOS; BBC; Citi; Family Fund; the Financial Conduct Authority (FCA); the Foreign, Commonwealth & Development Office; GCHQ; GSK; Lambeth Council; Mars; P&G and Visa.

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