In today’s hyperconnected world, millions of transactions occur every second, spanning multiple sectors and geographies. The digital world is bustling with activity and, more importantly, valuable data and identities. Unfortunately, invisible fraudsters are constantly on the prowl to exploit vulnerabilities that grant them access to systems. Once in, they engage in fraudulent activities, often disguised as legitimate, making them hard to spot. Payment fraud (card and transaction), account takeover (ATO), identity theft and authorized push payment (APP) are some common faces of fraud.
The greatest challenge in fraud management is that risks often go undetected until the damage is already done. Also, the window between the emergence of a potential risk and it causing actual impact is shrinking rapidly. Contrary to popular belief, fraud does not occur only when money is exchanged. Most modern fraud schemes begin with ordinary actions long before the actual financial transaction happens. They could begin with synthetic identity creation, a manipulated loyalty program, a planned account takeover or system manipulation for financial gain by an employee.
The digital economy has created unprecedented convenience for customers. Sadly, the same is true for fraudsters. They have devised sophisticated and ingenious ways, such as social engineering, to circumvent systems. Customers and businesses sometimes lose millions in a split second, and recovery is often tough or impossible with fraudsters leaving no trace behind. A study by TransUnion, which surveyed 1,200 business leaders globally, revealed that businesses lost an average of 7.7% of their annual revenue to fraud over the previous year, amounting to an estimated USD 534 billion.
In such a grim scenario, it’s important to track fraudsters in real time. Businesses must identify, detect and intervene against potential fraud before significant damage occurs. That’s a tall order, given the sheer volume, complexity and speed of the transactions that occur globally every second. Real-time fraud solutions change the game altogether by helping businesses stay one step ahead of scamsters. Let’s see how.
Speed without accuracy creates a new risk
With real-time fraud solutions, businesses can continuously monitor and flag suspicious activities to prevent potential fraud. This is a significant advantage in this fight. However, speed without intelligence creates another significant challenge. A transaction that appears suspicious in isolation may be legitimate when analyzed alongside broader contextual signals such as customer behavior, device intelligence, location consistency and transaction history.
Fraud solutions must apply robust controls to avoid blocking genuine transactions, as that could lead to negative customer experience. According to the Datos Insights report titled ‘The Smart Approval Advantage: Reducing Unnecessary Declines in Card Payments’, false declines alone cost the payments industry USD 213 billion globally in 2025. The report further highlights that 78% of financial institutions believe failed payments critically affect customer experience. These statistics underscore a key challenge that fraud management solutions must necessarily address.
Modern fraud solutions incorporate intelligent machine learning (ML) models that apply context, backed by AI-powered behavioral analytics, to avoid false positives. It isn’t just about blocking suspicious transactions fast but also ensuring customer experiences remain unaffected. According to LexisNexis Risk Solutions’ Global State of Fraud and Identity Report, the dark web has evolved into a sophisticated fraud-as-a-service marketplace, with artificial intelligence (AI) increasingly becoming both an enabler of advanced attacks and a powerful tool for defense. However, the report also highlights a positive trend, noting that collaboration across organizations can increase fraud detection rates by 43%. Here are a few key benefits of real-time fraud management solutions.
- Reducing the hidden cost of fraud: The actual fraud-related loss goes beyond the perceived cost. It includes charges of investigation, litigation, remediation and reputational damage. According to a LexisNexis Risk Solutions study, the average total cost of every $1 of fraud loss was $5.75 for US financial services alone. Businesses can limit such losses by flagging, preventing or reversing transactions in real time. Freezing accounts or reverting in-motion money transfers are possible actions through real-time fraud solutions, reducing risks and costs.
- Strengthening customer trust: Businesses can proactively alert customers about any suspicious activities in their accounts. In many cases, such alerts help customers avoid fraud and protect their assets, thereby enhancing trust and building loyalty. A thoughtfully orchestrated fraud solution enhances customer experiences by leaps and bounds.
- Ensuring compliance: Real-time fraud solutions can support compliance efforts by providing continuous monitoring, maintaining audit trails, and helping organizations identify potentially suspicious patterns in line with evolving regulatory expectations. Also, ML algorithms learn on the go and scan every transaction against an updated list of suspicious patterns. In the long term, they analyze transactions to identify anti-money laundering (AML) patterns to strengthen associated risk identification processes. This helps build resilience in the system by ensuring disruptions are limited and genuine.
Looking ahead: from detection to anticipation
Embracing real-time fraud solutions is now an imperative for businesses as they can no longer afford retrospective risk assessment. The goal is to create smarter barriers for the lurking thieves, because every fraud and every false positive is an added, avoidable cost. Businesses employing smart fraud solutions that ably distinguish genuine customers from genuine threats will succeed in this race to stay ahead.
How Infosys BPM can help
Infosys BPM’s tailoredfraud detection, prevention and management solutions span various industry sectors such as retail, telecom, financial services, utility and more. They cover industry-specific risk profiles, customer experience standards and regulatory expectations to detect, prevent and respond to fraud. These solutions have end-to-end fraud management capabilities backed by domain expertise, AI and ML, advanced data science and real-time monitoring.
