Adaptive analytics and self-learning AI

Fraudsters ensure their behaviour remains sophisticated, complex, and dynamic- a challenge where machine learning thrives. For continual performance improvement, fraud detection professionals should consider adaptive technologies designed to sharpen responses, particularly on marginal decisions. These are the transactions that are very closely aligned with investigative triggers, either just above or just below a certain risk threshold. It is on these margins where accuracy is most critical, as there is a fine line between a false positive event — a legitimate transaction which has scored too high, and a false negative event — a fraudulent transaction which has scored too low. Adaptive analytics sharpen this distinction with up-to-date knowledge of the threat vectors an insurer is facing.

Adaptive analytics technologies improve sensitivity to shifting fraud patterns by automatically adapting to recent confirmed case disposition, resulting in a more precise separation between frauds and non-frauds. When an assessor investigates a high-risk claim, the outcome — whether the claim is confirmed as legitimate or fraudulent — is fed back into the system to accurately reflect the fraud environment which assessors are facing, including new tactics and subtle fraud patterns that have been dormant for some time. This adaptive modelling technique automatically modifies the weights of predictive features within the underlying fraud models. It is a powerful tool that improves fraud detection performance on the margins and stops new types of fraud attacks.

XTND use adaptive analytics to balance the benefits of a model developed with data from most of the insurance industry, with the ability to quickly learn unique fraud patterns from an individual insurer and boost fraud performance and responsiveness. These adaptive analytics are a critical part of our Cognitive Fraud Analytics.

If properly applied, machine learning and artificial intelligence help provide the foundation for highly effective fraud detection controls. But that is not enough. Proper awareness is necessary to navigate the haze surrounding these topics, and develop a clear strategy that will scale and adapt with your needs.

In closing…

The TRUTH doesn’t have to hurt…

Reshape your claims environment book a chat with, Mouna Eksteen – Executive head, XTND