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What Is Entity Extraction and How Does It Fight Fraud?

Did you know that $1.9 billion was lost to fraud in 2019? Fraud includes common scams like phishing and imposter schemes as well as identity theft and impersonation. Because fraudulent activity costs individuals and businesses so much every year, fighting it is an important investment. One new way of combatting fraud is an information extraction technique that focuses on the identification and classification of key elements called entities. Discover how this process works and how it can help prevent fraud.

What Is Entity Extraction and How Does It Fight Fraud?

What Is an Entity?

There are two types of data, structured and unstructured. The majority of data is unstructured, which means that it’s neither organized nor defined. Sources of unstructured data are typically text-heavy, such as web pages, word processing documents, and web pages. Concepts within this data including names, dates, numbers, and organizations are called entities, and extracting these entities allows them to be defined, classified, and used to paint a larger picture.

How Are Entities Extracted?

Entity extraction is made possible by modern computing power. Specialized software is programmed to work with a multitude of issues to extract and classify entities. The software must be able to distinguish between similar names, recognize multiple languages, and disambiguate words that have multiple meanings. After the software recognizes an entity, an algorithm can then quickly file it into one or more pre-defined categories.

How Do Entities Fight Fraud?

The real work begins after entities are extracted and defined by the software. When you have hundreds or thousands of entities divided into categories, relationships between those entities begin to come into focus. These relationships allow security experts to connect aliases, observe patterns in events like financial transfers, and track suspicious activity. Then, patterns emerge that can expose fraud and pinpoint its perpetrators.

Tips for Choosing Extraction Software

If you’re interested in employing this technology for your own organization, it’s important to choose an extraction program with capabilities that suit your individual needs. Software that focuses on financial transactions is a great choice for a banking institution, while a social media company should choose a program that specializes in analyzing names from all over the world.

Remember, the best software is only as good as its operator. If you want to fully utilize this technology to fight fraud, you also need to hire skilled staff who know how to run the program and analyze its results. Another option is to hire a third-party tech security company that specializes in entity extraction and data analysis.

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