Two Heads Are Better Than One: Artificial Intelligence + Human Insight

eBook

TWO HEADS AREBETTER THAN ONEARTIFICIAL INTELLIGENCE

+ HUMAN INSIGHT

eBookTWO HEADS ARE BETTER THAN ONE: AI + HUMAN INSIGHT

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http://info.kount.com/boost-sales-beat-fraud

Artificial Intelligence (AI) + Human Insight .................................................................................... 3

Artificial Intelligence: Deep Learning / Human Insight: Competitive Reasoning .................... 4

Maximizing Results from Artificial Intelligence ............................................................................ 5

Capitalize on Big Data ................................................................................................................... 6

Take Advantage of Fraud Expertise ............................................................................................ 7

Precisely Screen Multiple Dimensions ...................................................................................... 8

Don’t Surrender Control ............................................................................................................... 9

Successful Human + Machine Collaboration ...............................................................................10

Two Heads Are Better Than One (Kount Uses Both). ..................................................................11

The Scientist Behind The Science. .................................................................................................12

About Kount ........................................................................................................................................13

Artificial Intelligence (AI) has received a lot of press lately. As a pioneer in applying AI to fraud prevention since 2007, Kount offers insights about how best to capitalize on AI in this eBook


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Artificial Intelligence (AI) + Human InsightTwo heads are always better than one. As an industry pioneer in using Artificial Intelligence (AI), Kount has applied Machine Learning to fraud prevention since 2007. Over those 8 years, we have refined an optimal strategy for maximizing AI.

AI does a number of things extremely well—for example, processing data at speeds far beyond human capability, exploiting in real-time the “network effect” of massive amounts of data, and finding patterns within a defined frame of reference.

Fraudsters, however, are by definition rule breakers. As thinking humans, they can quickly adapt to move outside an established frame of reference and change tactics in an attempt to thwart AI.

That’s why human insight is the other necessary component of fraud prevention. People excel at tasks like recognizing large frame patterns, creating new ideas, and strategically guiding machines based on specific business objectives.

This human element is vital to enhancing AI so that working together, the two disciplines help merchants get the maximum amount of sales with the minimal amount of fraud. Quickly, easily, and with least amount of effort.

Or to put it more simply: Boost Sales. Beat Fraud.


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Artificial Intelligence: Deep Learning

Human Insight: Competitive Reasoning

AI deep learning is a key component of fraud/risk prevention. The inherent deep learning abilities of AI deliver critical capabilities that are ideally suited for detecting and preventing card-not-present fraud:

• Process massive amounts of data in milliseconds • Exploit “network effect” of Big Data in real-time• Automatically predict new scenarios • Produce results that don’t require training time

Fighting opponents who adapt in real-time. The human ability to competitively reason enhances AI capabilities:

• See fraud as a “large frame competition” where opponents have no rules or code of conduct (i.e., the real world)

• Respond to human adversaries who are thinking, adaptable, strategic, and emotional

• Deploy multiple strategies to frustrate opponents with so many obstacles that they give up / move on to easier prey

WHERE HUMAN INSIGHT EXCELS• Creating new ideas• Large frame pattern recognition• Separating and defining memes from data• Discovering and predicting patterns based

on limited analog data• Providing strategic guidance for machines • Complex communication involving

multiple senses• Control response based on what’s best for

your specific situation

WHERE MACHINE LEARNING EXCELS• Processing, combining and counting massive

amounts of data at speeds far beyond human ability to comprehend

• Finding patterns within a defined frame of reference

• Following rules (algorithms) to achieve a result and recognize patterns

• Uncovering data for humans to analyze and understand

• Near perfect tactical acuity and consistency


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Maximizing Results from Artificial Intelligence A smart machine by itself is not enough. In order for Artificial Intelligence to perform at its highest level, more than just fast processing and clever algorithms are required. The quality of data being fed to AI is critical, as is the ability to customize results based not merely on generic rules or broad-based principles, but on what is precisely right for your specific business.

At right are four key capabilities you should look for in a fraud prevention solution employing AI/machine learning.

Capitalize on Big Data1Take Advantage of Fraud Expertise2Precisely Screen Multiple Dimensions3Don’t Surrender Control4


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Capitalize on Big DataBigger is better. The larger and more comprehensive the data set, the better AI can perform when it comes to quantifying the likelihood of fraud. In 2014 alone, Kount AI evaluated over 1 billion live transactions thanks to our strategic integrations

with the largest payment aggregators in the world. Big Data like this enables our AI to deliver superior results for more types of merchants selling more types of goods in more countries around the world.


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Take Advantage of Fraud ExpertiseNot everyone is a fraud expert. AI systems that rely heavily on reporting from merchants (who don’t have the time or inclination to be fraud experts) may lead to issues, like a high number of false positives. Why? About 2.8% of e-commerce orders are not shipped due to suspicion of fraud by merchants. Yet the actual fraud rate is less than

1%. In other words, nearly 2% of transactions that merchants think are fraud...are not. On the other hand, Kount has a proven record of accurately understanding, identifying, and quantifying fraud threats, which we leverage so our customers enjoy the highest order acceptance rates, while still holding fraud rate well below the 1% average rate.



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ProxyPiercer™

Geolocation

Cross-Merchant

Linking

AffiliateFraud Signals

REAL-TIMEANALYTICS

Multi-LayerDevice

Fingerprinting™

Persona™

Technology

Mobile DeviceSignals

DynamicMonitoring

TransactionVelocity

ShoppingCart Data

KOUNTArtificial

Intelligence

Precisely Screen Multiple DimensionsGarbage in, garbage out. Inaccurate data distorts the results generated by AI. Because Kount holds key patents on critical fraud screening technologies, our AI receives the most accurate data available. What’s more, these

variables interact with our AI in real time to generate the most sophisticated, most precise picture of every transaction—all in less than 300 milliseconds. The result is better fraud prevention...faster.

Kount’s leading screening technologies—like Multi-Layer Device Fingerprinting, Proxy Piercer, Cross Merchant Linking, Transaction Velocity, and more—penetrate even the most aggressive masking tactics and fraud techniques to reveal the true nature of every transaction. These data elements interact in real-time with Kount’s AI to deliver the most accurate and sophisticated fraud analysis possible ... in less time than it takes your human eye to blink.


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Don’t Surrender ControlNo one knows your business like you do. Try not to think of AI as some “set-it-and-forget-it” fraud prevention autopilot. The best AI solutions give merchants control over the balance between fraud prevention and order approval. With Kount, you have the power to approve more high-risk transactions for higher sales/higher chargebacks. Or decline more high-risk transactions/reduce chargebacks. All informed by the best AI capabilities. But you retain complete control over that balance, so it’s right for your specific situation.


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Successful Human + Machine CollaborationAbove average chess players armed with laptops beat Big Blue and Boris. Perhaps the most famous example of AI power is when the Big Blue computer beat Russian Garry Kasparov in 1997. Since then, the argument has raged: are humans or computers better chess players? But scientists have found that the most fearsome chess player is actually a hybrid: above average chess

players armed with laptops. It’s true. These human+machine teams consistently beat even the most powerful super computers and the most accomplished human Grand Masters. So which is smarter at chess—humans or computers? Neither. It’s the two together, working side by side. And the same is true in the field of fraud prevention.

APPLYING HUMAN INSIGHT TO MACHINE LEARNING TO BOOST SALES...BEAT FRAUDKount helped a US merchant start selling to buyers in Germany, something they would not have been able to handle without the capabilities of our AI engine.

But it took a human being to notice that many of the browsers visiting their English-language website had German as the default language, and to come up with the idea to develop a German-language version of their website!


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Two Heads Are Better Than One (Kount Uses Both)Merchants don’t win by only stopping fraud. They win by approving the maximum number of orders...while safely and cost-effectively mitigating fraud. After all, you could reject 100% of all orders and eliminate 100% of all fraud. Of course, that’s exaggeration. But the point is that the combination of people and machines working together in the right way are vastly

superior to either working alone. That’s why Kount’s approach has always been to utilize the deep learning capabilities of AI to collect and process vast amounts of data, and then provide intuitive, easy-to-use tools so people can apply their unique human capabilities to communicate, strategize, and guide machines to the optimum business result.



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The Scientist Behind the Science

Dr. Timothy Barber, Kount Founder and AI Pioneer. Dr. Timothy Barber lead the way in applying Artificial Intelligence/Machine Learning to the problem of card-not-present fraud. He holds a Ph.D. in Mathematics from Princeton University, and degrees in Philosophy and Physics from the University of Virginia.

Dr. Barber is the creator of dozens of crucial patents in area of artificial intelligence, as well as fraud, detection, data security, marketing, optics, and network optimization.

Prior to his success in the private sector, Dr. Barber spent seven years as part of an elite federal research group selected to solve some of the most difficult computational problems facing U.S. national security. Current research includes artificial intelligence, and the diagnosis of the algorithms that underlie the human capacity for abstract reasoning.

Dr. Timothy BarberFounder, Kount

“Humans have limited capacity (speed and memory)

for examining orders and finding patterns. The more

data you have and the faster it pours in, the harder it

becomes for humans to find those patterns ... like trying

to find needles in a gigantic, expanding haystack.

But Kount Artificial Intelligence has unlimited capacity

for pattern finding. It finds all the needles for you,

allowing your human agents to focus their efforts on

evaluating only those orders that are worthy of

their time.”


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About Kount

Boost Sales, Beat Fraud. Kount’s proprietary technology provides maximum protection for some of the world’s best-known brands. We help online businesses boost sales by reducing fraud and allowing them to accept more orders. Our all-in-one, SaaS platform is designed for companies operating in card-not-present environments, simplifying fraud detection and dramatically improving bottom-line profitability. We bring together your people, our people, and AI/Machine Learning to not just win the battle against fraud...but control the game.

Merchants using Kount can accept more orders from more people in more places than ever before. For each transaction, Kount’s “decisioning” engine analyzes hundreds of relevant variables

and activity across the globe in real-time providing the most accurate fraud prediction available. While reducing the risk of fraudulent activity, Kount’s intuitive business intelligence tools help merchants increase revenue opportunities in the future, thus boosting sales while reducing fraud. Kount is a single, turnkey fraud solution that is easy-to-implement and easy-to-use.

Contact Kount to learn more or to schedule a demo.Contact Jack Alton at 208-489-2701 or email [email protected]

In just 30 minutes we’ll show you how Kount employs Artificial Intelligence and Machine Learning to get the maximum amount of sales with the minimal amount of fraud. Quickly, easily, and with least amount of effort.

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Two Heads Are Better Than One: Artificial Intelligence + Human Insight

Data & Analytics

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