How Machine Learning is Beneficial in Financial Fraud Detection _ CFO Tech Outlook

1
How Machine Learning is

• Beneficial in Financial Fraud
• Detection CFO Tech Outlook

Source CFO Tech Outlook
The finance and banking industry considers
machine learning to be beneficial in financial
fraud detection. Unlike the other
2
innovative technologies, it will never be
outdated instead, it becomes even more valuable
after analyzing more complex cases.
As it performs vital activities such as
transaction processing and calculation, risk
rating, and even behavior prediction, machine
learning in finance is considered one of the
anchor points of several finance and banking
services disciplines today. The approach
minimizes the danger of missing suspicious
transactions, recognizes similar situations, and
prevents future ones. So, have a look at which
tasks can be performed using machine learning in
finance.
Examining Credit Scoring
Machine learning and finance are not just about
verifying credit card transactions. It can also
help credit scoring automation because it
entails a thorough examination of various data,
3
including personal information, payment history,
current income, and even credit history from
other financial institutions, before making a
final decision in each situation. Furthermore, it
can process a debtors personal information and
a complete examination of a persons social
media profiles to generate a high-quality data
analysis report. Moreover, machine learning-based
fraud detection makes it practically hard for
scammers to manipulate the credit score process
and profit from it.
Advising on The Most Effective Investment
Strategies
Financial fraud detection is critical when
deciding when and where to invest. Before making
any investment, it is crucial to weigh all the
risks and advantages associated with the process.
As a result, people frequently contemplate that
technology when leveraging huge investments,
such as various retirement or college
4
loans, trading, investing, and so on.
Furthermore, fraudulent investment instances
almost invariably result in irreversible
financial losses, and this is where machine
learning in fraud detection might make sense.
For high-value financial transactions, machine
learning for fraud detection assists people in
making informed judgments.