AI-driven fraud detection systems in financial services: A technical deep dive

Kiran, Sarat (2025) AI-driven fraud detection systems in financial services: A technical deep dive. World Journal of Advanced Research and Reviews, 26 (1). pp. 322-329. ISSN 2581-9615

The financial services industry is witnessing a transformative shift from traditional rule-based fraud detection to AI-driven systems that leverage advanced machine learning capabilities. This article explores the comprehensive architecture, implementation strategies, and operational considerations of modern fraud detection systems in the banking sector. Through analysis of system performance, feature engineering techniques, and model development approaches, the article demonstrates how AI-driven solutions significantly outperform conventional methods in both accuracy and efficiency. The article examines the critical balance between regulatory compliance and user experience, highlighting how advanced monitoring frameworks and adaptive security measures contribute to enhanced fraud prevention while maintaining customer satisfaction. The article reveals that integrated AI approaches, combining multiple modeling techniques and leveraging real-time data processing, provide superior fraud detection capabilities while reducing operational costs and improving overall system reliability.