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Published on 9 May 2024

Why GPU-Powered Fraud Detection is a Game Changer



Updated: 2 Jul 2024

Fraud is a massive and growing problem across many industries, costing businesses and consumers billions of dollars every year. From credit card fraud and identity theft to imposter and phishing scams, criminals are finding ever more creative ways to profit at the expense of others. Hence, detecting and preventing fraud has become a top priority.

Traditionally, fraud detection has relied on rules-based systems to identify suspicious patterns or activities. However, fraudsters have become extremely sophisticated at disguising their activities to avoid detection by these legacy systems. As the volume and speed of transactions have skyrocketed in the digital economy, you simply cannot keep up with manually reviewing each case. It has become clear that artificial intelligence-powered approaches are needed.

This is where GPU-accelerated computing for fraud enters the picture. GPUs are now widely used to accelerate compute-intensive workloads. As massively parallel architectures with thousands of cores, GPUs can process huge volumes of data orders of magnitude faster than traditional CPUs.

The Rising Wave of Fraud

Fraud is escalating at an alarming rate, according to the Federal Trade Commission data consumers reported losing nearly USD 8.8 billion to fraud in 2022, an increase of more than 30 per cent over the previous year. Consumers reported losing more money to investment scams—more than USD 3.8 billion—than any other category in 2022. The second-highest reported loss amount came from imposter scams, with losses of USD 2.6 billion reported, up from USD 2.4 billion in 2021. These malicious activities are growing at par as fraudsters take advantage of vulnerabilities from remote interactions. 

These fraud rates are expected to rise by 70% in the next five years if current legacy fraud prevention methods cannot keep pace. The outdated reliance on rigid rules-based systems has proven inadequate in the face of adaptive fraudsters who easily find loopholes to disguise their activities. Adding human review via large teams of fraud analysts is equally ineffective given the tidal wave of transactions that need reviewing. There are simply too many complex digital interactions happening in real-time across channels for manual or legacy approaches to accurately detect and stop fast-moving fraud.

Yet while criminals are using increasingly sophisticated techniques like device fingerprinting, botnets, and machine learning themselves, most fraud systems relying on legacy software have not changed substantially in over a decade. This alarming arms race is being won by tech-savvy fraudsters, with businesses and customers paying the heavy price of outdated protections.

Without a new advanced defence centred around artificial intelligence and machine learning rather than static rules, these alarming fraud trends show no signs of stopping. Reports suggest organisations that do not adopt modern AI-driven fraud prevention solutions could see fraud rates escalate significantly in the coming years. While organisations that embrace next-gen fraud technology will gain a distinct competitive edge.

AI and Machine Learning for Fraud Detection

Artificial intelligence and machine learning have become indispensable tools against increasingly creative yet destructive fraud activities. Unlike rigid rules-based systems, advanced AI algorithms can automatically detect complex patterns of criminal behaviour hidden across massive volumes of transactions and interactions. Machine learning approaches continually self-learn and adapts to evolving fraud tactics much faster than any manual or legacy systems.

The key advantage of AI is its ability to analyse hundreds of different behavioural, contextual, and historical signals compared to rules that focus on just a few pre-set parametres. Whether detecting identity impersonators, fraudulent accounts, or malicious bot activity, machine learning checks for anomalies across a forest rather than just a few trees. State-of-the-art algorithms even employ deep learning using neural networks with multiple hidden layers. Inspired by human brains, these networks uncover latent patterns within intricate multilayer relationships across time, devices, locations, networks and more signals.

AI-powered fraud detection systems offer scalability and efficiency for organisations to handle large volumes of transactions and interactions with minimal manual intervention. By automating the detection process and reducing false positives, these systems help streamline fraud investigation workflows, allowing them to focus their efforts on high-risk cases and improve overall operational efficiency.

GPU Accelerated AI for Fraud Detection

When employed for AI-powered fraud detection, GPU-powered systems can enable game-changing capabilities:

Machine Learning at Scale

Modern machine learning algorithms, especially deep neural networks are extremely powerful for pattern recognition across large, complex datasets. This makes them well-suited to detecting the subtle indicators of fraud, which can be like finding a needle in a haystack. However, these advanced ML models require tremendous computational horsepower. GPUs provide exactly that, allowing companies to train sophisticated AI-powered fraud detection models across billions of transactions.

What used to take days or weeks can now be accomplished in hours. Combined with automation, this means fraud systems can learn and adapt almost in real time rather than relying on outdated rules. The most advanced systems even employ continual learning to model evolving fraudulent behaviours as they occur.

Ultra-Low Latency

Catching fraud in the moment rather than after the fact is equally important. This requires being able to score transactions for fraud likelihood almost instantly before allowing them to be completed. Again, GPUs accelerating ML inference make this possible.

The ultra-fast processing capacity of GPU resources allows companies to apply powerful ML protections across their entire customer base without introducing frustrating delays. Customers expect fast and frictionless experiences, and GPUs enable that while enhancing security behind the scenes.

Cost-Efficient Scalability

The immense parallel processing power of GPUs provides tremendous cost savings for fraud AI workloads. A single GPU offers performance equivalent to hundreds of CPU cores at superior energy efficiency. As data volumes and model complexity increase exponentially, GPU infrastructure offers scalable performance via simple, incremental expansion, unlike expensive CPU clusters. 

Hyperstack, for example, offer specialised cloud GPUs for AI workloads at cost-effective prices. By leveraging cloud-based GPU resources, businesses can dynamically scale their fraud detection capabilities while only paying for the resources they use, avoiding the upfront costs and maintenance associated with on-premises hardware. This not only reduces capital expenditures but also ensures optimal resource utilisation, maximising the efficiency of fraud detection operations.

Use of AI for Fraud Detection Across Industries

GPU-accelerated AI plays a key role in combating fraud across a wide range of industries, offering unique capabilities tailored to the specific challenges and requirements of each sector. Here's how GPU-accelerated AI powered fraud detection in different industries:

Banking and Finance

  • Real-Time Transaction Monitoring: GPU-accelerated AI enables banks and financial institutions to monitor transactions in real time, identifying suspicious activities such as unusual spending patterns or transactions occurring outside of typical user behaviour.

  • Fraudulent Account Detection: By analysing account activity and user behaviour, GPU-accelerated AI helps detect fraudulent account creations, identity theft, and account takeover attempts, protecting both customers and financial institutions from fraudulent activities.

  • Credit Card Fraud Prevention: GPU-accelerated deep learning algorithms analyse transaction data to detect patterns indicative of credit card fraud, such as multiple transactions from different locations in a short period or unusual spending behaviour, allowing banks to flag and block fraudulent transactions in real-time.


  • Claims Fraud Detection: GPU-accelerated AI assists insurance companies in identifying fraudulent claims by analysing claim data, policy information, historical patterns, and external data sources to detect inconsistencies or suspicious activity.

  • Healthcare Fraud Prevention: In the healthcare insurance sector, GPU-accelerated AI helps detect fraudulent billing practices, medical identity theft, and fraudulent insurance claims, reducing financial losses and protecting patient privacy.

  • Risk Assessment: GPU-accelerated AI algorithms analyse vast amounts of data to assess risk factors associated with insurance policies, enabling insurers to identify high-risk applications and potential fraudsters before issuing policies.

E-commerce and Retail

  • Payment Fraud Detection: GPU-accelerated AI analyses transaction data and customer behaviour to detect fraudulent payment activities, such as stolen credit card information, identity theft, and fraudulent purchases, helping e-commerce businesses minimise losses and protect customer accounts.

  • Account Takeover Prevention: GPU-accelerated AI helps prevent account takeover attempts by identifying suspicious login activities, anomalous user behaviour, and unauthorised access attempts, enabling retailers to secure customer accounts and prevent data breaches.

  • Fraudulent Returns Detection: GPU-accelerated AI algorithms analyse return patterns and customer behaviour to detect fraudulent return requests, such as returning stolen or counterfeit items, helping retailers minimise revenue losses and maintain profitability.


  • Subscriber Fraud Detection: GPU-accelerated AI assists telecom companies in detecting subscriber fraud, such as subscription fraud, call and data usage fraud, and identity theft, helping to reduce revenue leakage and improve overall profitability.

  • Billing Fraud Prevention: GPU-accelerated AI algorithms analyse billing data and usage patterns to detect anomalies indicative of billing fraud, such as unauthorised charges, subscription errors, and service manipulation, enabling telecom companies to safeguard revenues and enhance customer trust.

AI-Driven Solutions for Fraud Detection

Here are some real-world examples of how companies across industries are leveraging AI powered fraud detection and prevention:

  1. Banking: HSBC uses AI and machine learning algorithms to provide seamless customer experiences along with preventing money laundering and other financial crimes. Models help compliance teams catch sophisticated criminal networks manipulating the financial system - something legacy transaction monitoring tools failed to detect over years of activity.

  2. Financial Services: Mastercard’s Brighterion platform uses AI to improve customer experiences and reduce fraud. It's highly scalable, meaning it can grow with your needs, and offers powerful personalisation options for tailored solutions.

  3. E-Commerce: In its approach to fraud prevention, Shopify employs machine learning technology to predict and flag potential fraudulent transactions across its network, providing merchants with accurate and real-time insights. Over the years, Shopify has trained its machine learning models using a vast dataset of more than 10 billion transactions from millions of merchants. By aggregating relevant data during the checkout process, Shopify aims to predict the likelihood of fraud and continuously improve its machine learning algorithms. The platform leverages various signals, including the customer's country, IP address, behavioural patterns, payment details, and wallet type, to provide merchants with insights that aid in predicting fraudulent orders. Past encounters with fraudulent transactions and flagged customers contribute to informing future risk assessments, enhancing the accuracy of fraud detection

Final Thoughts 

As you have seen, advanced artificial intelligence promises immense opportunity to finally gain the upper hand against fraud draining trillions from the global economy and threatening to erode consumer trust. However, AI's full potential relies on leveraging scalable and speedy fraud detection with parallel processing architectures like GPUs in the cloud. Without robust computational power, even the most sophisticated algorithms fall short, leaving organisations vulnerable to outdated protection mechanisms against increasingly sophisticated attacks. The consequences of lagging are significant, ranging from financial losses due to fraud to reputational harm and diminished competitive advantage as industry leaders embrace GPU-accelerated AI solutions.

Fortunately, cloud-based GPU platforms now offer convenient pay-as-you-go models, enabling organisations to adopt transformative AI innovations without the burden of upfront infrastructure costs. Companies need to seize the opportunity presented by readily available technology to deliver quick returns for their customers and shareholders alike. At Hyperstack, we provide access to top-tier NVIDIA GPUs specifically designed to tackle demanding AI and ML workloads. Our transparent cloud GPU pricing ensures there are no hidden costs, eliminating the need for upfront investments. 

Similar Read: How GPUs Power Up Threat Detection and Prevention


Which AI algorithm is used for fraud detection?

AI algorithms commonly used in Fraud detection algorithms include random forest, logistic regression, neural networks, support vector machines, and clustering. These algorithms learn patterns in data to identify anomalies and suspicious behaviour that may indicate fraud.

How do GPUs accelerate AI for fraud detection?

Here’s how GPUs accelerate AI for fraud detection: 

  • GPUs allow AI fraud detection models to process vastly more data in parallel compared to using CPUs alone. This enables analysing transactions in real-time to identify fraud as it occurs. 

  • GPUs significantly speed up large AI model training times by enabling the rapid processing of the huge datasets required. This allows more model experimentation to improve accuracy. 

  • GPU-powered cloud services provide scalable and flexible GPU access, making it easier for organisations to leverage AI for fraud detection.

What is the use of AI for fraud detection in different industries?

AI for fraud detection is used across banking and financial services to analyse transactions for signs of credit card fraud, money laundering, or identity theft. In insurance, it identifies potentially fraudulent claims. In e-commerce, AI can detect fake accounts and payment fraud during online purchases and transactions.

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