KakaoPay Securities has built an artificial intelligence (AI)-based fraud detection system (FDS) and will apply it to real transactions from this month.

KakaoPay Securities said on Nov. 12 it will strengthen its response system by linking abnormal transaction detection with anti-money laundering (AML) and financial consumer protection, centered on the AI FDS, as financial fraud methods and criminal fund movement become more complex.

The AI FDS combines machine learning-based risk analysis functions with the existing abnormal transaction detection framework.

It learns from a range of transaction data and financial fraud cases to identify unusual signs. It also analyzes links between transactions and complex risk signals that are difficult to confirm from individual information alone.

It provides staff with the risk level of detected transactions and the basis for judgments. It also supports checks of suspicious transactions and follow-up measures.

The detection scope has been expanded to fit the characteristics of securities trading. It includes targets beyond deposits and withdrawals and account opening, such as stock selling and currency exchange, the transfer of stocks to and from accounts at other securities firms, and the process of changing user information.

The measures are aimed at responding to financial fraud in which criminals sell stocks after taking over an account and withdraw the proceeds, or move shares to another securities firm.

The system also analyzes the trading environment and fund flows. It combines multiple signals appearing in access and trading environments to check the possibility of account theft, and detects abnormal fund flows through deposit and withdrawal patterns and links between transactions.

It is expected to be used to reduce the likelihood that accounts are used for voice phishing, investment scams, illegal gambling and illegal private lending.

The company has also strengthened its organization and specialist workforce. KakaoPay Securities revamped its organizational structure in March to integrate operations for abnormal transaction detection and anti-money laundering work. In July, it recruited as head an anti-money laundering and financial consumer protection expert with 26 years of experience in the financial sector.

It is also strengthening cooperation with its customer service center. It will refine related systems so that user verification and guidance, consultations, protective measures and responses to 피해 can follow abnormal transaction detection.

A KakaoPay Securities official said, "As financial fraud evolves by combining multiple means and transactions, it is important to examine signals and fund flows together." The official added, "With this buildout as an opportunity, we will create an environment where users can trade with peace of mind."