Fraud detection

A process for monitoring transactions and activities to detect deceptive or unauthorized behavior. It uses defined methods and analysis to help businesses and financial institutions identify, investigate, and respond to fraud.

Example

A credit card company might use several methods to detect potential fraud, such as monitoring transactions for unusual spending patterns, applying models to identify anomalies, and setting up real-time alerts for suspicious activity. When potential fraud is detected, the company can act quickly, for example by temporarily freezing the account or contacting the cardholder to verify the transaction. This helps reduce financial losses and maintain customer trust.