Mastercard unveiled a generative artificial intelligence (AI) developed internally to verify financial transactions in real time and determine whether they are legitimate or not. The group estimates that banks will be able to save at least 20% of their expenses thanks to its system.
Powered by technology to deceive banks and customers, frauds are becoming more frequent and more sophisticated. Industry players are trying to develop various systems to counteract them. For example, Mastercard deployed, last July, an AI called Consumer Fraud Risk to urgently warn banks of a scam in real time, even before the money leaves the trapped person’s account. The payment systems giant is now capitalizing on generative AI with Decision Intelligence Pro, a model which will greatly improve the detection of scams, he believes.
AI determines if a transaction is potentially fraudulent by analyzing cardholder behavior
The algorithm was trained using data from approximately 125 billion transactions made each year by the company’s card network. Rather than text as is the case with large language models like GPT-4 or Gemini, Decision Intelligence Pro uses a cardholder’s history of visits to a merchant to determine whether the firm involved in a transaction is a place where the customer is likely to go.
In just 50 milliseconds, the model studies risks, like a radar, to determine whether the transaction could be fraudulent. A high score corresponds to usual behavior expected from the card holder, while a low score implies an unusual approach. “ Early modeling shows that AI improvements increase fraud detection rates by 20% on average, and even 300% in some cases », assures Mastercard in a press release.
“ Using generative AI, we transform the speed and accuracy of our anti-fraud solutions, diverting efforts away from criminals and protecting banks and their customers. Supercharging our algorithm will improve our ability to anticipate the next potential fraudulent event, instilling trust in every interaction “, comments Ajay Bhalla, President of Cyber and Intelligence at Mastercard. In addition to improving the system for detecting fraudulent transactions, AI also reduces the number of false positives by more than 85%.
The banking sector is also capitalizing on generative AI
Artificial intelligence has particular appeal for many sectors, and banking is one of them. Mastercard has invested more than $7 billion in cybersecurity and AI technologies over the past five years. Likewise, Visa recently developed a $100 million venture capital fund aimed at generative AI start-ups.
With its new technology, Mastercard believes it will be able to identify patterns and trends in scams, allowing it to anticipate future types of fraud that are still unknown within the payments ecosystem.
Sources: MasterCard, CNBC
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