Artificial Intelligence-Powered Fraud Detection: Transforming Risk Management in the Digital Economy

In the modern digital economy, the volume and speed of online transactions have opened up new opportunities for growth—and unfortunately, new vulnerabilities for fraud. Traditional fraud detection systems, largely dependent on static rules and manual auditing, are proving inadequate in coping with rapidly evolving and increasingly complex fraud tactics. Artificial Intelligence (AI), empowered by techniques such as machine learning, deep learning, and natural language processing, offers a dynamic, accurate, and real-time solution to fraud detection. This paper provides a comprehensive exploration of the role AI plays in combating fraud, covering core techniques, real-world applications across industries, challenges, and the future direction of AI-driven fraud prevention systems. The aim is to demonstrate how AI can serve as a transformative tool in enhancing security, reducing operational risks, and building a trustworthy digital infrastructure.