Natural Language Processing: The Tech Behind AI’s Human-like Communication

What is Natural Language Processing?

Natural Language Processing (NLP) is a piece of artificial intelligence that allows computers to understand natural human language and interact with humans using it.

Machine learning models train using freely available human conversations online, like social media data, to form a baseline understanding of how humans communicate. With the help of ML researchers, AI uses this data to mimic human linguistics, allowing machines to communicate with us just as we communicate with each other.

Natural language processing techniques

There are a handful of ways NLP processes data inputs to produce human-readable language:

• Tokenization – Breaks down a text into smaller units, usually words or subwords. This helps convert the text into manageable units.
  Part-of-Speech Tagging – Assigns grammatical parts of speech (nouns, verbs, adjectives, etc.) to each word in a sentence. Shows the ML model the syntactic structure of a sentence.
• Named Entity Recognition – Identifies and classifies entities (e.g., names of people, organizations, locations) in text. Extracts structured information from unstructured text.
  Parsing and Syntax Analysis – Analyzes the grammatical structure of sentences to understand the relationships between words. Helps in understanding the meaning of sentences and their components.
• Sentiment Analysis – Determines the sentiment or emotion expressed in a piece of text (e.g., positive, negative, neutral). Useful for gauging public opinion, customer feedback, and market trends.
• Machine Translation – Translates text from one language to another automatically. Facilitates communication and information exchange across language barriers.
• Speech Recognition – Converts spoken language into written text. Enables hands-free operation, voice assistants, and transcription services.
• Question Answering – Understands and responds to user queries in a natural language format. Facilitates information retrieval and interaction with users through conversational interfaces.
• Text Summarization – Generates concise and informative summaries of longer text documents. Aids in quickly extracting key information from large volumes of text.
• Word Embeddings – Represents words as dense vectors in a continuous vector space. Captures semantic relationships between words, enabling better understanding of word meanings.
• Attention Mechanisms – Mechanisms that allow models to focus on different parts of the input when making predictions. Improves the handling of long-range dependencies and enhances performance in tasks like machine translation.
• Recurrent Neural Networks (RNNs) and Transformers – Deep learning architectures for processing sequences of data, commonly used in NLP. Enables the modeling of context and dependencies in sequential data.

These techniques are often combined and applied in various combinations to address specific NLP tasks and challenges. Advances in deep learning, particularly with the use of neural networks, have significantly improved the performance of NLP models in recent years.

Natural language processing examples

NLP has useful applications in many domains and industries. Most rely on NLP to automate and enhance tasks involving human language. Some examples of how NLP is used include:

1. Text Classification – Think spam detection in emails, where NLP classifies emails based on the content.
2. Sentiment Analysis – Analyzing social media posts or product reviews to determine the sentiment expressed by users (positive, negative, or neutral).
3. Named Entity Recognition (NER) – Identifying and categorizing entities such as names of people, organizations, locations, and dates in a news article.
4. Machine Translation – Google Translate uses NLP techniques to automatically translate text from one language to another.
5. Speech Recognition – Virtual assistants like Siri or Google Assistant convert spoken language into written text to understand and respond to user commands.
6. Chatbots and Virtual Assistants – Customer support chatbots on websites that use NLP to understand user queries and provide relevant responses.
7. Text Summarization – Automatically generating concise summaries of long articles or documents.
8. Question Answering Systems – Systems like ChatGPT and IBM Watson can answer user queries by extracting information from a given text.
9. Information Extraction – Extracting structured information from unstructured data, like details about events from news articles.
10. Text Generation – Content creation, including automatically generating product descriptions, news articles, or creative writing. This is possibly the most widely used application, for both positive and negative reasons.
11. Document Classification – Automatically categorizing documents into predefined categories, such as classifying support tickets into different issue types or writing rules for fraud prevention systems.

NLP in fraud prevention

Natural Language Processing (NLP) plays a crucial role in fraud prevention by helping organizations analyze and understand textual data to identify potential fraudulent activities.

Knowledge Graphs for Link Analysis

NLP techniques, when combined with knowledge graphs, enable organizations to create a structured representation of relationships between entities. This can be useful for detecting complex fraud schemes by identifying connections between seemingly unrelated pieces of information.

Text Analysis for Anomaly Detection

NLP can analyze unstructured textual data, such as transaction descriptions, customer communications, or notes, to identify unusual or anomalous patterns that may indicate fraudulent activities. It can recognize discrepancies or inconsistencies in the language used in various documents or messages.

Email and Communication Monitoring

NLP is used to analyze emails, chat logs, or other communication channels for suspicious language patterns. It can identify phishing attempts, social engineering tactics, or any communication indicative of fraudulent behavior.

Sentiment Analysis

Analyzing sentiment in customer interactions, reviews, or feedback can provide insights into potential fraud. Sudden changes in sentiment, especially negative feedback related to transactions, could be a red flag.

Identity Verification

NLP is employed in identity verification processes by analyzing textual data in documents such as passports, driver’s licenses, or utility bills. It helps in ensuring the consistency and legitimacy of the information provided.

Transaction Monitoring

NLP can be used to analyze transaction descriptions, comments, or notes associated with financial transactions. Unusual language patterns or discrepancies in the transaction details may trigger alerts for further investigation.

Social Media Monitoring

Monitoring social media for mentions of a company or its products can provide early indicators of fraudulent activities. NLP helps in extracting relevant information and assessing the sentiment around the brand.

Automated Fraud Detection in Applications

NLP algorithms can be integrated into applications and systems to automatically detect fraudulent activities based on the analysis of textual data. This can include monitoring user interactions, transaction details, or account activities.

Pattern Recognition in Claims Processing

NLP can analyze textual information in insurance claims or financial reports to identify patterns associated with fraudulent claims. It helps in flagging suspicious claims for further investigation.

Regulatory Compliance

NLP can assist in monitoring and ensuring compliance with regulations by analyzing textual data in legal documents, contracts, or compliance reports. This helps organizations identify potential risks and maintain adherence to regulatory requirements.

DataVisor leverages NLP in our market-leading fraud detection and prevention solution to help our customers proactively fight against fraud. Learn how this powerful technology can level up your fraud prevention by booking a personalized demo with our team.