Published on: April 2026
AI-BASED FRAUD DETECTION SYSTEMS IN BANKING AND THEIR EFFECT ON FINANCIAL RISK MANAGEMENT
Kunal Kumar Singh
Dr. Kalpana Rawat
Article Status
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Abstract
The rapid digitization of banking services has significantly increased the risk of financial fraud, including credit card fraud, identity theft, and online transaction fraud .In recent years, financial institutions have increasingly turned to artificial intelligence (AI) to combat fraud and enhance risk management strategies. As the complexity of financial transactions and the sophistication of fraudulent activities grow, traditional rule-based systems become insufficient. AI technologies, particularly machine learning (ML), natural language processing (NLP), and predictive analytics, have proven to be essential in detecting fraudulent activities in real-time, improving the accuracy of risk assessments, and reducing operational costs. This research paper explores the integration of AI in financial transaction fraud detection and risk management, discussing its applications, benefits, challenges, and future prospects. This research investigates the impact of AI technology in banking institutions through its use cases while exploring methodologies together with advantages along with barriers it creates. This research shows that AI-controlled financial systems use data protection methods to minimize losses and produce better decisions with additional needed steps to protect data security and ethical standards.
How to Cite this Paper
Singh, K. K. (2026). AI-Based Fraud Detection Systems in Banking and their Effect on Financial Risk Management. International Journal of Creative and Open Research in Engineering and Management, <i>02</i>(04). https://doi.org/10.55041/ijcope.v2i4.675
Singh, Kunal. "AI-Based Fraud Detection Systems in Banking and their Effect on Financial Risk Management." International Journal of Creative and Open Research in Engineering and Management, vol. 02, no. 04, 2026, pp. . doi:https://doi.org/10.55041/ijcope.v2i4.675.
Singh, Kunal. "AI-Based Fraud Detection Systems in Banking and their Effect on Financial Risk Management." International Journal of Creative and Open Research in Engineering and Management 02, no. 04 (2026). https://doi.org/https://doi.org/10.55041/ijcope.v2i4.675.
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- •All submissions are screened under plagiarism detection.
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- •Authors retain copyright.
- •Peer Review Type: Double-Blind Peer Review
- •Published on: Apr 24 2026
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