Mastercard is selling a new AI-powered tool to some of the biggest banks in UK in a bid to help them detect if their customers are sending money to fraudsters. The company charges banks a fee based on the transaction value for the new tool and is planning to roll it out globally. Mastercard is also in talks with potential clients in the US, India and Australia.
The Consumer Fraud Risk system designed by Mastercard has been implemented by nine banks in the UK including Lloyds Banking Group Plc, Natwest Group Plc and Bank of Scotland Plc etc. , news agency Bloomberg reported.
The AI-based tool helps in determining if customers are sending money to an account associated with Authorized Push Payment (APP) scam. These scams work by tricking victims into sending money by posing a legitimate family member, friend or business.
Ajay Bhalla, president of cyber and intelligence at Mastercard, told Bloomberg that APP fraud is a "huge problem" for banks because they are difficult to detect because victims' accounts are not compromised as they make voluntary payments.
The system works by assigning a risk score, ranging from 0 to 99, to each transfer within half a second, and then combining this score with analytics to provide banks with an assessment of the transaction and, if necessary, block it before the money is transferred out of the victim's account.
Mastercard is able to provide the risk score because it runs the infrastructure for real-time electronic transfers of funds through its subsidiary Vocalink. For the past five years, Mastercard has worked with UK banks to follow how scammers move their proceeds through a sequence of “mule” accounts – often at several different banks – to obscure their activity. This has allowed Mastercard to identify patterns of behaviour and accounts associated with scams that it’s used to train
(With inputs from Bloomberg)
