The federal government’s bet to use artificial intelligence to combat financial crime appears to be paying off.
Machine learning AI helped the U.S. Treasury Department sift through massive amounts of data and recover $1 billion in check fraud in fiscal year 2024 alone, according to new estimates shared first with CNN. That’s nearly triple what the Treasury took in the previous financial year.
“It’s really been transformative,” Renata Miskell, a senior Treasury official, told CNN in a telephone interview.
“Leveraging data has improved our performance in fraud detection and prevention,” Miskell said.
The Treasury Department credited AI with helping officials prevent and recover more than $4 billion in total fraud in fiscal year 2024, a six-fold increase from the previous year. previous year.
American officials quietly started using AI to detect financial crime in late 2022, building on what many banks and credit card companies are already doing to stop the bad guys.
The aim is to protect taxpayers’ money against fraud, which increased during the Covid-19 pandemic while the federal government hastened to provide emergency aid to consumers and businesses.
Certainly, the Treasury does not use generative AI, the kind that has captivated users of OpenAI’s ChatGPT and Google’s Gemini by generating images, developing song lyrics and answering complex questions (although this is sometimes still necessary). struggles with simple queries).
Instead, fraud detection efforts rely on machine learning, the subset of AI that excels at analyzing large amounts of data and making decisions and predictions based on what she learned.
AI can be very useful in the fight against financial crime by analyzing almost infinite streams of data and detecting subtle patterns – all in a fraction of the time it would take a human to do so. Experts say that once sophisticated AI models are trained, they can detect suspicious transactions in just milliseconds.
“Fraudsters are really good at hiding. They’re trying to secretly game the system,” Miskell said. “AI and data mining help us find these hidden patterns and anomalies and prevent them. »
This is particularly crucial for the Treasury, which is among the largest payers on the planet, if not the largest.
Each year, Treasury makes about 1.4 billion payments valued at nearly $7 trillion to 100 million people. It’s responsible for sending everything from Social Security and Medicaid payments to federal workers’ paychecks, tax refunds and stimulus checks.
This essential role makes the Treasury a prime target for fraudsters seeking to steal from taxpayers.