Fraud is evolving, and many Australian businesses may struggle to keep up with fraudsters who are continuing to find new ways to evade detection and exploit vulnerabilities. In the twelve months to June 2021 alone, the Australian Payments Network found fraud on payment card transactions totalled $490.1 million, an increase of 9.2 per cent from the year before. Further, research from Statista shows that as of 2021, around 1.25 million dollars had been lost in online shopping scams in Australia. For retailers of all sizes, it has never been more important to get ahead and proactively find a solution that helps to stop fraudulent transactions without turning away legitimate customers and limiting opportunities for growth. What your business needs, however, depends on the size of your organisation or the trajectory of growth that you are on.

With the worldwide pandemic, consumer behavior has shifted significantly. There has been substantially less travel -- employees haven't been driving to the office, flying on planes, or taking cruises. Many have gone out less, stopped going to movies, and don't hang out on Friday night after work. This has caused a major disruption in the financial flow. To survive, many businesses -- small and large --have pivoted to bring and scale their businesses online.

Total protection is needed to prevent attacks on customer data. Domain expertise, algorithms, data, models, and monitoring are all crucial aspects of a potential fraud ecosystem that must be addressed to keep scammers at bay. Fraud detection models are great, but they are only as effective as their data, features, and those monitoring them. Think about the big picture first and ensure you have every needed element. Once that is in place, make sure you employ the best of the best and address every detail no matter how minute or seemingly minor.

The threat of a data breach is now an ever-present part of life for customers and the banks that serve them. A reported 3,813 data breaches across a number of industries -- collectively exposing 4.1 billion customer records -- occurred in the first six months of 2019, for example. This has become a larger problem for FIs as they must not only deal with protecting customers from fraud, but also guard against bad actors armed with 4.1 billion stolen credentials. Account opening fraud is a favorite tactic among such cybercriminals, many of whom rely on these credentials to pose as legitimate customers. Banks thus need to accurately determine potential customers' legitimacy as soon as they decide to sign up.

On a surface level, community banking and artificial intelligence (AI) can seem like something of a mismatch in concept. Community banking is all about relationship-lending -- forging personal and lasting connections directly with a consumer, while AI -- particularly embodied by chatbots and voice assistants -- focuses primarily on digitally mediating that personal relationship. Tina Giorgio, president and CEO at ICBA Bancard, says that surface perspective misses the bigger AI picture and the scope of what AI can offer to community bankers and their customers across the country. According to Giorgio, AI is a "tremendous opportunity" for community banking. In fact, she says that it could be a game changer for community banks over the next five years. "There is tremendous potential with the advent of AI to help level the playing field in the financial services space," she said.

A.CG: The first and most obvious use of machine learning in insurance is that risk and claims will be calculated by software and decisions to insure or to pay out will be made by software - software, not people - and at least many holders of policies will feel that they are being treated mechanically without due regard to the human nuances of their circumstances. NP: What will be interesting over the next 6-12 months will be AI's compatibility with regulation. The main issue that insurers will have is how heavily regulated the industry is. Regulations will only increase (with the introduction of AI), we also have the Insurance Distribution Directive (IDD) coming in later this year. The senior manager's regime will be coming into the insurance space by the end of this year and extending into early 2019.

One of the most pressing concerns that keeps retail professionals up at night is how to combat fraud. Retailers could lose upwards of $71 billion from fraudulent online transactions over the next few years, yet some executives feel that publicly acknowledging a fraud issue would harm their brand. One of the most significant fraud concerns merchants face today are false positives -- i.e., transactions attempted by legitimate customers that are tagged as suspicious by fraud prevention systems, ultimately leaving money on the table. Because their effect is so difficult to accurately measure, false positives are often ignored, and their cost greatly underestimated. However, a majority of retailers say that fraudulent transactions that aren't detected cost more than a legitimate transaction that's inaccurately declined, despite some evidence that the opposite is true. What's more, relatively few companies track false positives.

When it comes to security in their financial transactions, American consumers want it all. In Total System Services, Inc.'s 2016 U.S. Consumer Payments Study, a whopping 74% of all respondents said they would choose the credit card with the best security features over the credit card with the best rewards. Payment networks like Mastercard Inc. have done their best to respond. In the past couple of years, Mastercard has experimented with a number of cutting-edge security initiatives. These innovations have included everything from an app that allows cardholders to take a selfie for payment authentication to a wearable band that uses the account holder's unique heartbeat as authentication. Late last month, Mastercard introduced its latest pioneering security platform, Decision Intelligence.