How a new frontier in computing might change the fight against fraud forever
Fraud examiners working in financial services are familiar with cutting-edge innovations to fight fraud. But quantum computing may be a game changer. Here we explore how this groundbreaking technology could help CFEs and some of the dangers it might entail.
September/October 2022
By Stefano Siggia and Mason Wilder, CFE
Fraud examiners working in financial services are familiar with cutting-edge innovations to fight fraud. But quantum computing may be a game changer. Here we explore how this groundbreaking technology could help CFEs and some of the dangers it might entail.
In 2020, a Spanish quantum technology startup, Multiverse Computing, tested its quantum algorithm’s ability to detect fraud on a set of actual credit-card payments from across the European Union. The algorithm, operating on an IBM quantum computer, sifted through nearly 300,000 payments, and identified 200 fraudulent transactions. In an interview with Fraud Magazine, Multiverse’s co-founder and Chief Security Officer Román Orús, Ph.D., said his company’s quantum algorithm is 2% more accurate in scoping out fraud than the artificial intelligence software (AI) many financial institutions currently use. Two percent might not seem significant, but those few extra percentage points could help a large bank save millions of dollars from being lost to fraud, Orús adds.
Computers using quantum technology — technology using the physics of subatomic particles — can instantly solve computational problems an ordinary PC might take decades to solve. Physicists and other experts have studied its application for many of the dilemmas of modern life, from fighting climate change to decreasing traffic jams and developing long-lasting batteries. (See “Are You Ready for the Quantum Computing Revolution?” by Shohini Ghose, Harvard Business Review, Sept. 17, 2020, and “10 Quantum Computing Applications and Examples,” by Stephen Gossett, BuiltIn, June 8, 2022.)
Quantum technology’s ability to quickly crunch gargantuan-sized datasets and recognize patterns now holds much promise for fraud detection, especially in the banking industry where large sums of money and millions of transactions take place every day.
“Quantum computing could be a game changer for fraud detection and prevention,” says Walt Manning, CFE, CEO of the Techno-Crime Institute. “We are already using artificial intelligence for cybersecurity and fraud detection, and that will become even more essential in the future.”
Culled from: www.fraud-magazine.com/article.aspx?id=4295019616
