Why machine learning is not the silver-bullet solution to online fraud

5 Days left: TNW Europe early bird sales end soon. Learn more!“No battleplan ever survives contact with the enemy,” is one of history’s most telling statements on military strategy. It’s also the philosophy that data scientists, fighting an increasingly sophisticated class of fraudsters, must live by. We’re in the midst of an escalating battle against online fraud. In its True Cost of Fraud Study, LexisNexis found that annual e-commerce fraud costs alone reached $32 billion in 2014, representing a 38 percent increase over the year before. For every dollar of revenue, merchants are losing more to fraud despite spending more money on fraud countermeasures. Simply put, fraudsters are getting better. Accessibility, anonymity, and automation allow them to ply their trade at industrial proportions. Machine learning has emerged as the best…


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