How is AI reshaping fraud detection in banking and insurance

A strong governance function can bridge security gaps.

AI-driven fraud is outpacing the defenses of banks and insurers, with financial institutions now turning to AI for more robust, proactive fraud prevention strategies, according to Rosanna Canlas, Head of Information Security at Allianz PNB Life.

“AI is transforming the way we approach fraud prevention, making it more efficient, accurate and proactive,” Canlas said. “This results in higher accuracy and fewer false positives.”

AI’s role in predictive analytics is particularly noteworthy. “It analyses behavioral patterns and identifies high-risk transactions or claims even before they occur. This proactive approach allows us to prevent fraud rather than just react to it,” Canlas explained.  

At Allianz, AI technologies are employed to monitor and analyse network activities, detect unusual patterns, and predict potential security threats before any harm occurs.

“We integrate adaptive learning into our fraud prevention strategies so that we can more effectively manage risks, streamline claims processing, and improve overall customer experience,” Canlas said. Automated processing also plays a crucial role, enabling insurers to flag suspicious claims quickly, thereby reducing the time and effort required for investigations.  

Beyond AI, addressing the biggest security gaps requires robust information security governance. Canlas emphasised that this governance function is critical for strategic oversight, policy development, risk management, and optimal resource utilization.

“Keeping our customers informed about suspicious activities on their accounts not only helps in early fraud detection but also involves them in the security process. It makes them feel safer knowing that our systems are online for them 24/7,” she stated.