Displacing Existing Fraud & Risk Platforms Will Be Hard Since Machine Learning Is Already Deployed

by Tim Sloane 0

 ai Corporation has launched a cloud-based fraud and risk management machine learning platform. As a cloud implementation, the business model is interesting and likely to leverage reinforcement learning to create a positive feedback loop as new clients utilize the service, but competition will be fierce:

“The ai Corporation (ai) an FCA approved expert in fraud and risk management, has today launched its outcome-based fraud service model.

By combining ai’s world leading fraud experts and its artificial intelligence/machine learning capability, the new service model will enable organisations to outsource all aspects of their fraud management function to ai’s team, under a performance-based contract.

With the new service, ai will be fully responsible for implementing a customer’s fraud strategy definition, based around clear key performance indicators. The new approach also means that ai is fully accountable for any fraud losses and will be compensated in line with successfully stopping fraud. ai’s outcome-based service is technically distributed via the cloud, hence avoiding major upfront IT costs.

Matthew Attwell, Risk and Client Service Director of ai, says: ‘Our outcome based service model is the culmination of many months of hard work, statistical calculations and focused live service from our alert management team. We are able to offer the new service because we are so confident in our man and machine learning technology; that after the initial base cost, we won’t ask our clients for a penny more until we have achieved the promised performance – and that goes for all our clients who sign up to the new service.’

Dr Mark Goldspink, CEO of ai says: ‘We wouldn’t be able to offer this service without Matt’s team of experts and the way they have integrated our machine learning tools into their day to day operations. ai’s success is based on our clients being successful and this service exemplifies how committed we are to performing and becoming a trusted partner within their business. It also clearly focusses our research and development activities, because under a service-based model, it is in our best interests to develop practical and operationally sound products.”

It boils down to this: Will the efficacy of this platform be noticeably better than existing fraud and risk management firms, such as LexisNexis and ACI. Existing firms are already entrenched and are receiving significant streams of data across multiple financial institutions and merchants. They have also already embraced machine learning and have integrated it into their existing fraud and risk management platforms. Properly implemented it would appear the incumbents have an advantage.

Overview by Tim Sloane, VP, Payments Advisory Service at Mercator Advisory Group

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