Artificial Intelligence is a quickly evolving technological advancement aimed to offer security and convenience.
We set our finance teams a significant challenge when we asked them to root out fraudulent expenses. The time and resources it has taken led many organizations to simply accept a certain level of losses to dishonest acts.
It’s why more companies are now switching from paper-based setups to faster and more efficient digital expenses management tools. But finance professionals could soon have an even more powerful weapon in their fight against fraud - artificial intelligence (AI).
The ability of AI to analyze data, identify patterns, and highlight risks have already been demonstrated in the banking sector. Payment providers such as MasterCard and RBS WorldPay successfully use AI systems to help protect their customers from fraud.
They use a complex set of algorithms to identify the typical spending habits for each user and then trigger an alert whenever suspicious behavior is identified. It looks at every aspect of customer transactions - their frequency, when and where they’re from, even the type of devices they’re made on.
The real-time nature of these systems allows a payment to be instantly blocked, preventing it from being processed until the customer can confirm its validity. And thanks to a process of ‘machine learning’, the more data the systems receive, the smarter they can become at differentiating between normal and suspicious.
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This kind of real-time monitoring is already being used by finance teams to protect the business from fraud. A digital expense management system such as Webexpenses allows automatic policy checks to be made whenever a claim is made.
It makes sure the claim falls within company policy limits, as well as any custom limits that have been set. When there’s a breach, the user can be notified via an on-screen notification; alerts can also be sent to the finance team.
It allows expenses management to become active and preventative rather than a purely reactive process - identifying issues before they’re allowed to become resource sapping problems.
With the development of AI, we will have the potential to push much further in this direction. By analyzing and interpreting expenses data, it would be able to sniff out suspicious-looking behaviours.
It would be able to ‘learn’ the specific workings of a company, the typical spending patterns, and behaviors of employees in various roles. It could identify those traits that are most commonly displayed by employees who falsify or exaggerate claims.
It opens up the intriguing possibility of being able to identify potential expenses fraud before it happened. It would provide finance teams with a heat map of an organization, identifying the ‘hot’ and ‘cold’ risk areas.
Where the risks are highest, actions could be taken to deal with any underlying problems and to ensure that compliance procedures are robust enough to cope with the threat.
So AI offers up some exciting possibilities for the future of expenses management and unlocks the potential to move the focus to prevention rather than cure. But just like any tool, this kind of system will only be as good as the finance professionals who use them.
Find out how Webexpenses can help your business to take back control of employee expenses.