Artificial Intelligence in Practice

31American Express: Using Artificial Intelligence To Detect Fraud And Improve Customer Experience

American Express handles more than 25% of US credit card spending, accounting for $1.1 trillion of transactions in 2017,¹ and is the world's most valuable financial services brand according to Forbes.²

The company puts data and analytics, driven by machine learning, at the heart of everything it does; however, two of its key use cases are detecting fraud and improving customer experience.

What Problem Is Artificial Intelligence Helping To Solve?

Global credit card fraud causes losses of around $20 billion to businesses and customers every year.³ This often takes the form of card not present fraud when stolen or forged details are used to purchase goods or services over the internet or telephone.

Card payment processing systems must be built to handle large volumes of transactions every minute of every day to be useful to businesses and consumers. This means attempts at fraud must be detected quickly and there is only a small window of opportunity to do so. Incorrectly flagging up valid transactions as fraudulent is inconvenient for customers, and if it happens too often, they will look to other methods of payment to avoid the hassle.

As fraudsters are often technologically adept themselves, they have developed and deployed high-tech systems of their own to circumvent anti-fraud security systems. This can include “spoofing” location data to make it appear to security systems ...