Samson Edozie Speaks on Importance of Artificial Intelligence In the Financial Sector

There has been a significant transition in the financial sector in Nigeria, as technology is increasingly changing service delivery and operations. In this wise, a financial expert, Samson Ikechukwu Edozie takes a look at the financial sector and offers insights on how to use Artificial Intelligence Model development initiative for fraud detection and prevention within the financial sector.

Edozie observes that rising criminality in the sector has necessitated setting up a formidable system that handles intrusion from external sources effectively.

He noted that Financial organizations are highly targeted by cybercriminals, given that they deal with high volume financial transactions.

” According to him, no business can survive without financing, making the financial sector an integral part of economic activities. Based on this, many fraudsters take advantage of this avenue to deploy different dubious techniques to trick organizations in this sector, leading to the loss of substantial funds.

” Fortunately, with the advancement of technology, financial organizations have begun to adopt artificial intelligence to increase their operational efficiency, particularly in fraud detection and prevention. This article investigates the role played by artificial intelligence in detecting and preventing fraud in the financial sector in Nigeria using model development initiatives,” Edozie posits.

In his summation, he asserts that fraud is a widespread problem in Nigeria, affecting a wide range of industries including banking, government, and private companies, as reported by the Association of Certified Fraud Examiners (ACFE).

“The banking and finance sector remains one of the most affected sectors with the loss of billions of dollars annually, particularly from cybercrime, corruption, and other fraudulent activities. With the rapid growth of technology comes an exponential increase in cyber fraud in Nigeria, with phishing scams and identity theft being the prevalent ones commonly used by criminals. The increasing fraudulent activities call for taking proactive steps to prevent further occurrences, given that the ancient method has grown to become less effective in identifying crime activities,” he states emphatically.

According to him, Artificial intelligence, with the use of existing data, looks promising and reliable to assist organizations in the financial sector in Nigeria to tackle frauds in different forms.

Adding that this can be viewed from the perspective of an algorithm that learns from itself to keep improving over time as more data gets into the system.

” More specifically, Machine learning, a subset of artificial intelligence, can be leveraged to perform fraud detection and prevention tasks, using a trained financial sector and crime data.

“This is achievable through identifying key indicators related to operations and business activities in the financial sectors as well as fraud cases and cyberattacks.

“As reported by The Economist Intelligence Unit (TEIU), 22 percent of the total cost of financial organizations in Nigeria can be reduced through the use of Artificial Intelligence for fraud prevention. With artificial intelligence being adopted across different sectors, more specifically the private sectors, it is expected that a good deal of financial organizations would follow the trend by 2030. This forecast was based on the evidence of the proven application of artificial intelligence in the corporate world to offer solutions to reoccurring challenges.

“Addressing fraud detection in financial services is an ongoing challenge that demands continuous adjustment to the ever-changing landscape of financial crimes . Financial fraud carries significant risks for individual consumers and has the potential to undermine the integrity and stability of the entire financial system,” Edozie affirms in his summation which he said is guided by deep research and painstaking investigation.

He further told Thisdaylive that Although successes have been recorded in terms of detecting fraudulent activities in the financial sectors, it still remains challenging to prevent fraud, adding that it can be attributed to the new techniques being utilized by the perpetrators after discovering that existing ones have been detected and blocked.

“This implies that it may be impossible to completely prevent frauds, as fraudsters are constantly monitoring financial activities to capitalize on loopholes. Additionally, financial organizations are faced with regulatory and compliance issues, which may limit the ways data are being used to avoid privacy infringements.

“Nevertheless, financial sector in Nigeria can achieve a significant improvement in terms of detecting and preventing frauds. Stakeholders within the sector must be conversant with both online and offline fraudulent activities in real time. Having up-to-date knowledge ensures that data can be collected as it relates to contemporary times to tackle fraud cases. That could also help to prevent unexpected attacks as they relate to the current period. Key players within the financial sector should be sensitized regarding different techniques utilized by fraudsters, and they must work collaboratively with cybersecurity experts and machine learning professionals to deal with challenges faced in the financial sector through internal and external attacks,” he states

He concludes that artificial intelligence can be leveraged by the financial organization to tackle frauds in Nigeria.

“We can do this through building machine learning models using key indicators relating to operations in the financial sector. This initiative can contribute significantly to prevention and detection of fraud in the financial sector in Nigeria despite the growing number of fraudsters and cybercriminals. Being constantly aware of criminal activities puts financial organizations in a favorable position to effectively deal with fraud issue,” he asserts.