Artificial intelligence (AI) has become a game-changer in so many fields, and now it's helping the U.S. government impressively fight financial crime. In fiscal 2024 alone, machine learning and artificial intelligence-enabled the U.S. Treasury Department to recover $1 billion in check fraud—nearly triple what was recovered the previous year. So, what makes this such a big deal for the future of artificial intelligence? Renata Miskell, a key official at the Treasury, told CNN that it has been nothing short of “transformative.” By leveraging machine learning AI, the Treasury has dramatically upped its game in fraud detection and prevention. And it’s not stopping there—AI in government is set to expand even further.
Overall, AI has helped the Treasury prevent and recover over $4 billion in fraud during the last fiscal year—an incredible six-fold spike compared to 2023. But how did AI become such a crucial tool?
In late 2022, U.S. officials began quietly using AI to detect financial crimes. They followed the example of leading banks and credit card companies, which already use AI for fraud detection. The primary goal was clear: protect taxpayer dollars. This became especially critical during the COVID-19 pandemic when fraud surged as the government rushed to disburse emergency aid.
You might be wondering, what's the difference between machine learning and artificial intelligence in this context? While many people associate AI with generative tools like OpenAI’s ChatGPT, the U.S. Treasury relies on machine learning AI, which analyzes massive data sets and makes predictions based on patterns it identifies. Unlike generative AI, designed to create content or answer complex questions, machine learning is specifically used to detect and prevent fraud.
Miskell highlighted how AI can scan through vast amounts of data and pick up on patterns in a fraction of the time it would take a human. “Fraudsters are good at hiding, but AI helps us find those hidden anomalies,” she said.
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The U.S. Treasury is one of the world’s largest payers, making over 1.4 billion payments worth nearly $7 trillion annually. With such a massive responsibility, it’s no surprise that fraudsters target the Treasury to steal taxpayer money. That’s why AI in government is proving to be essential.
AI is not only effective at catching fraudsters, but it’s also helping to prevent future fraud attempts. Last year, the IRS even deployed AI to detect tax cheats by analyzing large, complex tax returns. This is a sign of things to come for the future of artificial intelligence in government.
One of the major pros of artificial intelligence is how fast it works. Experts say AI can process suspicious transactions in milliseconds, which means the Treasury can act quickly to stop fraud before it spirals out of control. As the technology evolves, we can expect jobs in AI and AI-related business opportunities to grow, especially as more sectors, including the government, adopt these technologies. With online payment fraud expected to surpass $362 billion by 2028, AI’s role in fraud detection is more important than ever. But it's not just about catching the bad guys—AI is also helping businesses and governments save money, making it an essential tool for financial security moving forward.
While AI is helping governments and businesses stay ahead of fraudsters, it’s also becoming a tool for criminals. For example, earlier this year, a finance worker in Hong Kong was tricked into paying $25 million through a deepfake video. This has led U.S. officials to warn that AI introduces new risks to the financial system. Treasury Secretary Janet Yellen even referred to AI as an "emerging vulnerability." But don’t worry—AI systems still have a human in the loop. This means that while AI flags suspicious transactions, federal officials make the final decision on whether something is fraudulent. This balance ensures that AI for your business can be just as reliable as it is powerful.
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The U.S. Treasury is just getting started. Miskell hinted that the Treasury is exploring more advanced uses of artificial intelligence, taking cues from artificial intelligence related business leaders in the private sector. Although the specifics remain under wraps, it's clear that there is an AI for that when it comes to spotting fraud. The Treasury is working to enhance fraud detection tools across federal and state-administered programmes, and officials are testing new data sources to better spot fraudulent activity.
As more agencies adopt these advanced tools, the demand for courses in machine learning and artificial intelligence is likely to rise. Whether you’re interested in AI for fraud detection or looking to apply artificial technology to other sectors, now is the time to dive in.
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