Fraud Monitoring involves the continuous review, analysis, and surveillance of transaction data to promptly identify and respond to potential fraudulent activity. Payment processors, banks, and card networks all utilize advanced fraud monitoring systems, which leverage technologies like artificial intelligence and machine learning to detect unusual or suspicious activity.
This might include a high volume of transactions within a short time frame, transactions originating from unusual or high-risk locations, or transactions that deviate from a customer’s typical purchasing behavior. In instances where potential fraud is detected, these sophisticated systems can swiftly alert the institution and the customer, prompting immediate action.
This could range from temporarily blocking the card to contacting the customer for verification or initiating an investigation. By proactively identifying and mitigating fraud, these systems play a critical role in protecting consumers, businesses, and the integrity of the financial system.