For as long as there is money, there are people who will try to game the system. Even some promo codes like the ICE Casino 25€ can be abused, and it is why casinos are doing everything they can to reduce fraud. Today, one of the most powerful tools that casinos use is AI.
How? With artificial intelligence, there is little to no need for a human being to identify behavioral anomalies. The AI will do it. While it is not completely perfect, it does significantly reduce the occurrences of fraud.
Why Do Casinos Have to Detect Fraud?
It is not only casinos that detect fraud. Any organization that transacts financially must do it. Without detection activities, the casino will become a haven for fraudsters and money launderers.
These are the most common fraud tactics today:
- Card theft – criminals hack users’ phones and PCs and take credit card information to make deposits or purchases.
- Account takeover – people can take over a casino account and use it for nefarious purposes, such as money laundering.
- Identity theft – criminals will steal someone’s identity and use it to commit other crimes. The police will trace this identity to the victim, and perhaps charge the wrong person with crimes.
Fraudsters have taken a different approach when the internet became a part of daily life. To them, it is much safer to commit fraud online because they can’t be identified.
How Artificial Intelligence Detects Fraud
There are many ways by which artificial intelligence can detect potentially fraudulent transactions. The system may not be perfect, but it does help eliminate many would-be cases of fraud.
Pattern Recognition
Human behavior has a pattern, and this pattern can be calculated manually. However, if you use a human, this will take a lot of time and can be subject to erroneous interpretation.
Artificial intelligence not only detects potentially fraudulent transactions, but it also learns. In a basic standard, the AI will track patterns and decide whether or not to let the transaction go through. As the AI gathers more data, it can learn new behavioral patterns and then overwrite itself.
The AI will also detect an anomaly, not just against the written code of standard, but also against the card behavior. It means that it can assess what this card or user has done in the past and decide if the transaction it is trying to accomplish now is fraudulent.
Make Predictions of Potential Fraud
Since AI can learn, it can also make statistical predictions. The prediction is based on the analysis of past or historical information. This learning capability not only deals with individual users but the industry as a whole.
For example, if there is an influx of fraudulent money-laundering activities in the gambling industry, specifically using cryptocurrency, Artificial Intelligence can detect this and act on it. It can reduce the number of crypto transactions to also reduce risks.
Automated Investigations
Today, even court systems use AI to process documents and review cases. Platforms like YouTube use AI to detect violations of policies, and also make investigations.
For example, the YouTube algorithm can detect sound waves and copies of a film. The AI will then investigate and detect that the video used copyrighted material. From here, the algorithm will send a warning to the creator.
The same thing happens in the casino industry. The AI can investigate a potential fraud case. If it is already a case, the AI can gather data. Here are some examples of how this is done:
- Cross-referencing the data with other sources of information.
- Validation of the user’s identity.
- Use other databases as a source of information (cases of fraud in the past).
- Generate reports.
In this situation, Artificial Intelligence can decide whether or not to raise the flag over a transaction. For example, if the card number used for a deposit exists in a crime database or a hacking leak, the AI can say that this is a huge risk. From here, it will block the transaction and notify the user of the problem. In addition, the technology can write a report that summarizes its findings. A human being will read this report and decide what to do with it.
Crime is an escalation. Those who commit frauds will always find a way to succeed. Even so, the battle rages on, and it is not only the casino industry that fights this. Even the financial institutions are at the forefront of this war against frauds.
As AI gets better, there is confidence in the community that it will also check the validity of cryptocurrency transactions. When that time comes, fraud detection, even for blockchain, will happen in real time. Customers no longer have to wait!