PayPal’s CISO on how generative AI can improve cybersecurity

VentureBeat lately sat down (nearly) with Assaf Keren, CISO and VP of enterprise cyber safety at PayPal. Keren’s profession at PayPal spans eight years and features a broad base of expertise constructing safety merchandise, managing safety infrastructure and creating and main safety providers.

Earlier than PayPal, Keren based two cybersecurity startups, served as head of safety product administration at Verint and was CISO for the Israeli e-Authorities Division (Ministry of Finance).

PayPal’s AI-driven cybersecurity technique is paying off

For his or her newest quarter (FY Q2 2023), PayPal reported $7.3 billion in income, up 7% year-over-year, or 8% on a overseas currency-neutral (FXN) foundation. Stable beneficial properties in transaction progress of 5% and a 37% enhance in value-added providers income contributed to a powerful quarter. PayPal ended the calendar yr 2022 with $27.5 billion in income and has a trailing twelve-month (TTM) income run price of $28.5B.

PayPal’s complete cost quantity grew 11%, supported by 10% transaction progress, whereas tight expense management drove an 11% decline in non-transaction prices. Regardless of a $1.2 billion affect from loans originating for the pending BNPL sale, PayPal generated sturdy free money circulation and returned $1.5 billion to shareholders. General, PayPal confirmed wholesome quantity and consumer engagement progress, considerably improved profitability, and progress on strategic initiatives.

Recognized for the depth of their experience utilizing AI, machine studying (ML) and pace of coaching and deploying deep studying fashions to harden cybersecurity and scale back fraud, PayPal’s 11% discount in losses within the newest quarter amidst rising volumes point out AI is delivering worth at scale. Attaining a double-digit discount in losses by means of improved danger administration signifies that the corporate’s AI-powered cybersecurity defenses, fraud detection fashions and AI-powered danger administration are decreasing transaction losses.

The next is an excerpt of VentureBeat’s interview with Keren.

VB: How can generative AI bolster safety with out negatively impacting the client expertise?

Keren: Whereas gen AI could also be utilized by attackers for malicious functions comparable to producing false identities or creating malware variants that evade conventional safety measures, it would additionally empower security-forward organizations like PayPal to discover gen AI-driven protection mechanisms, comparable to next-generation automated menace detection techniques and response capabilities. We’ve got all the time put safety on the heart of what we do and construct merchandise with safety in thoughts by design. With gen AI, there can be alternatives to enhance our capabilities, take away friction and drive better buyer worth.

VB: What are the dangers related to utilizing gen AI, and the way can these be mitigated for platforms dealing with a considerable amount of personal information?

Keren: Gen AI, like several new expertise, have to be rigorously evaluated and deployed with security and duty as high priorities. Vital elements like information high quality, mental property, safety, privateness and compliance are key issues. To mitigate dangers, it’s necessary for expertise leaders to look at these dimensions scrupulously earlier than deploying gen AI to guard clients and protect their belief. Altering the methods we take into consideration testing and offensive safety to incorporate assault patterns comparable to immediate injection, checking for bias and figuring out the place the fashions hallucinate will enable gen AI to be deployed in a means that’s helpful to clients.

VB: Can gen AI assist with fraud detection? In that case, how will you validate its accuracy?

Keren: Sure, and in a way, it already is. PayPal has been an early adopter of AI, and now we have been constructing our AI capabilities and experience for over a decade. We’ve been using transformer-based deep studying for years, which is the important thing expertise behind giant language fashions (LLMs) like ChatGPT. As we speak, we use AI and ML throughout broad domains in our enterprise, together with fraud discount, buyer safety, personalised providers, danger administration and international commerce empowerment.

VB: Are you able to share the outcomes PayPal is reaching utilizing AI for fraud detection?

Keren: It’s led to great affect: from 2019 to 2022, at a time when our annual cost volumes almost doubled from $712 billion {dollars} to $1.36 trillion {dollars}, we lower our loss price by almost half, partially due to our advances in AI algorithms and expertise.

As we speak, with our advances in AI, we’re in a position to quickly adapt to altering fraud patterns to guard our clients. PayPal’s deep studying fashions may be skilled and pushed to manufacturing inside 2 to three weeks and even faster for easier algorithms. This enables us to coach fashions with the newest manufacturing information, incorporate new fraud patterns and combine suggestions from inner brokers and PayPal clients.

VB: How does the quickly altering monetary expertise panorama affect gen AI technique adoption?

Keren: As an organization with near 430 million lively accounts and 35 million retailers on our two-sided community, we see great potential within the energy of AI to create the following technology of checkout and commerce. As we speak, PayPal holds over 200 petabytes of funds information — information that’s key to our aggressive benefit that holds great insights and potential to energy higher commerce experiences for customers and retailers.

We’re actively assessing gen AI and its potential affect on our enterprise and the aggressive panorama, and we’re enabling inner groups to contemplate the place gen AI can improve effectivity, enhance our safety, enhance the client expertise, defend our clients and develop our enterprise.