Artificial Intelligence Helps Businesses Secure Customer Data and Combat Financial Fraud

In a Nutshell: The growth of artificial intelligence signals a future ripe with technological advancements. But criminals can also use artificial intelligence to commit crimes against vulnerable businesses and their unsuspecting customers. Trace3 provides consultancy that helps companies strengthen their online security and fend off hackers.

Watching a movie can be a great way to unwind when you’re feeling under the weather or after a busy day at the office. Movies give us a window into another time and place: We can see what life was like in the 1800s or how things might unfold if aliens found their way to our planet.

I’ve always enjoyed movies set in the future because it’s fascinating to see a director’s vision of how different life will be in the coming years. We aren’t all driving around in flying cars yet, as some films predicted we’d be by now. But with developments in artificial intelligence (AI), some of the technologies filmmakers anticipated we’d experience in the future have arrived in the 2020s.

Trace3 is a firm that provides technology consultancy to businesses. The company works with its clients to help them learn how AI can help their businesses reach new heights. We spoke with Asher Lohman, Vice President of Data and Analytics with Trace3, to learn how the company leverages technology to support businesses.

Trace3 works with organizations that operate in various sectors, including financial services, healthcare, and manufacturing. The company also serves businesses in the entertainment industry and major sports organizations. Lohman told us Trace3 is the analytics partner of the NFL’s Detroit Lions, who fell one game shy of reaching the Super Bowl during their 2023 campaign.

Trace3 provides businesses with all the services you’d expect a leading technology consultancy to offer, including cloud and security solutions, but Lohman told us the firm’s concentration on innovation sets it apart.

“I love our focus on innovation, which is really a core differentiator for Trace3,” Lohman told us. “You’ll find that, if you talk to other people, there aren’t a lot of other organizations that have dedicated research teams that are talking with venture capitalists about emerging technology. And 20% of our business is emerging technology, which is really unique in this space.”

Like many of the influential technology firms in the U.S. today, Trace3 started in California. Lohman told us Trace3 helps large businesses in almost every state in the U.S., and its offices are strategically located to serve its customers. The company maintains its corporate headquarters in Irvine, California, but it also has offices across the country in cities such as Columbus, Ohio, Grand Rapids, Michigan, and Denver. 

While industrious minds can use new technologies to invent products and streamline processes, criminals can use those same technologies to deceive people. Lohman told us hackers try to exploit a person’s lack of familiarity with a new technology and vulnerabilities within systems. 

We’ve all had our days interrupted by a call from an unknown number. Usually, I just let those calls go to voicemail. But sometimes my curiosity gets the best of me, and I answer the call. 

Within seconds, I regret my decision when I find the person on the other end of the call isn’t a person at all but an automated voice speaking to me in a monotone. Phone calls like that are annoying, but they can also do more harm than waste your time. Lohman told us that some robocalls can lead to identity theft.

“What we’ve found is that hackers can take these calls and create a digital version of your voice that they can then use to go after people you know, like your relatives or coworkers, to try and extract funds or information from them,” Lohman told us. “So one of the things I recommend, especially for consumers, is to never answer a call if you don’t know the number. I know that can be hard sometimes, but just let it go to voicemail.”

Hackers can also use online videos people post to create fake representations of someone’s identity. Lohman told us about one such case in Hong Kong where a fraudster was able to create a fake version of a person in an online meeting and manipulate an employee into wiring them millions of dollars.

If you receive an incoming call that you suspect is from a company you know, rather than answering the call, Lohman suggests using their published phone number to call them back.

“We have to be very careful to understand who it is that we’re talking to,” Lohman told us. “Fraudsters can gather information about you from a variety of places, and, before you know it, now they’ve got a digital representation of you, which is pretty terrifying.”

You’ve probably heard of the concept of fighting fire with fire. The idea speaks to using similar tactics as your opponent to overcome them. Trace3 uses technology, specifically AI, to combat the technological tricks of fraudsters.

The company works with financial institutions to build user profiles that include a customer’s preferences for using a business’s online programs. Trace3 captures the time when a person signs on to a company’s online interfaces and the location they access them from. Lohman told us AI can recognize behavior that doesn’t align with a customer’s profile. In that scenario, it will ask people to authenticate themselves again before continuing to use an online service.

Although some online security defenses have been available for years, Lohman said Trace3 now uses AI that can make decisions based on an interaction that’s happening in real time. 

“Another way AI can help financial institutions is in how it can collect information,” Lohman told us. “Lenders can do an authentication for a loan document much more quickly by using AI to go out and gather information behind the scenes. One of the things I like about AI in the financial space is how it can now actually accelerate things that have taken a long time in the past.”

Artificial intelligence can also identify products you may benefit from using. Lohman said that AI can analyze a trader’s transaction history and how they’ve structured an investment portfolio to make personalized recommendations for other financial solutions. 

Most large financial services firms use some level of automation to handle customer questions and help borrowers complete credit card or loan applications. Nobody likes getting stuck in a company’s automated voice system when they’re trying to find an answer to a question, but Lohman told us those systems should improve over time. 

“We’re still in the toddler phase of AI, and we’re not even anywhere close to getting to what the future state could be,” Lohman told us. “There are a lot of other things we’re seeing in this space around credit risk and credit scores that use AI to take a wider view of things. When it comes to credit, companies have to really understand what criteria AI is using to give recommendations to make sure it’s of a quality that allows them to make decisions accurately.”

When it comes to driving a car, people should follow multiple safety measures to keep themselves and others safe. After all, just because you fasten your seatbelt every time you get in the driver’s seat doesn’t mean you should blow through red lights and take off-road shortcuts. Businesses that want to safeguard customer information should also implement more than one protective step.

Trace3 recommends businesses take a layered approach to securing customer data. Businesses can integrate AI systems with the traditional security practices they use. Lohman told us that taking things like complex behavioral analyses and pairing them with real-time systems monitoring can help businesses build strong security strategies.

“On the customer side, we advise putting things like biometrics on your phone or having some level of authentication with two factors,” Lohman told us. “Those things aren’t driven by AI, necessarily, but if you pair them together with AI then you’ve got a pretty robust solution.”

Trace3 recommends that businesses leveraging AI make sure the models they use are continuously learning. Lohman told us it’s critical for AI models to grow as they take in new data so they can stay ahead of hackers who change their methods of attack in response to security roadblocks they encounter.

Escaping the reach of media outlets in the 2020s is hard. Cellphones and smart wearables keep the internet just a tap away. But just because AI is a popular topic in business news doesn’t mean everyone understands how it can help protect us from online threats.

Lohman told us it’s important for people and businesses to learn how technology can stop scams.

“People need to recognize how dangerous things like phishing attacks and identity theft can be,” Lohman told us. “Businesses can hold regular training events to make sure their employees understand standard security practices. As we start implementing more AI solutions, we need to avoid the traps that are the most common.”