U.S. Treasury's AI-Driven Fraud Detection Recovers Over $4 Billion in 2024
This article was initialized by a human, created by AI, updated by a human, copy edited by AI, final copy edited by a human, and posted by a human. For human benefit. Enjoy!
The U.S. Treasury Department’s strategic use of machine learning AI to combat financial crime has delivered significant results, recovering $1 billion in check fraud during fiscal 2024 alone, nearly tripling the amount from the previous year. In total, AI helped the Treasury prevent and recover over $4 billion in fraud, marking a six-fold increase year-over-year.
According to Renata Miskell, a top Treasury official, AI has been transformative in detecting fraud, identifying hidden patterns in massive datasets that human analysts might overlook. The AI models used by the Treasury are not generative AI (like OpenAI’s ChatGPT), but rather machine learning systems that excel at quickly analyzing vast amounts of data to flag suspicious transactions.
This approach is crucial for the Treasury, which processes about 1.4 billion payments annually, valued at nearly $7 trillion, making it a prime target for fraudsters. The deployment of AI to detect financial crimes began quietly in late 2022, following techniques already in use by private-sector banks and credit card companies. Miskell emphasized that while AI flags potential fraud, human officials still review and confirm each case.
AI has emerged as a double-edged sword, with its potential to combat fraud on one side and its capacity to assist criminals on the other. For example, deepfake technology recently enabled fraudsters to steal $25 million in Hong Kong. Treasury Secretary Janet Yellen has warned about the risks AI poses to the financial system, classifying it as an “emerging vulnerability” in late 2023.
As online payment fraud is projected to exceed $362 billion by 2028, the Treasury is accelerating its development of advanced fraud-detection tools and collaborating with state agencies to fight unemployment insurance fraud.
Interested in the latest updates on AI technology? Follow us on Facebook and join our group (Link to Group ↗️) to leave your comments and share your thoughts on this exciting topic!
