HOW AI AND MACHINE LEARNING IMPROVE FRAUD DETECTION IN FINANCIAL TRANSACTIONS.

Financial fraud poses significant risks to both institutions and consumers in the digital economy.Traditional detection methods often fail to keep pace with sophisticated fraudulent schemes.This paper examines the integration of Artificial Intelligence (AI) and Machine Learning (ML) in enhancing fraud detection within financial transactions.By analysing vast datasets in real-time, AI-driven models can identify anomalous patterns indicative of fraud.The study reviews various AI methodologies, discusses their benefits and challenges, and explores future directions, including the integration of blockchain technology to improve data integrity and transparency.