Mastercard’s new AI tool helps UK banks in handling APP scams

In the wake of growing banking scams, Mastercard announced offering an AI driven tool to UK banks to help detect if the customers are sending money to fraudsters.

New Delhi,UPDATED: Jul 7, 2023 16:29 IST

Highlights

Almost nine banks in the UK have deployed Mastercard’s latest AI tool
Masertcard has worked for almost five years with UK banks to develop this AI tool

In an effort to assist banks in determining whether their clients are sending money to fraudsters, Mastercard is selling a new AI-powered solution to some of the largest banks in the UK. The company plans to roll out the new tool globally and currently charges banks a fee based on the transaction amount. Additionally, Mastercard is in discussions with prospective customers in the US, India, and Australia.

As per the recent information, almost nine banks in the UK, including Lloyds Banking Group Plc, Natwest Group Plc, and Bank of Scotland Plc, have deployed the Consumer Fraud Risk system created by Mastercard.

Mastercard offers solution for APP frauds

If clients are sending money to an account linked to the Authorised Push Payment (APP) fraud, the AI-based solution can help identify that. These frauds are done by convincing victims to contribute money by impersonating a real friend, family member, or company.

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Given the growing amount of cyber attacks, Ajay Bhalla, President of cyber and intelligence at Mastercard, said that APP fraud is a big concern for banks because it is challenging to identify as the accounts of the victims are not compromised while they make voluntary payments.

As per the system, it works in a way where each transfer is given a risk score within half a second, ranging from 0 to 99. This number is combined with analytics to give banks an assessment of the transaction and, if required, to block it before the money is transferred out of the victim's account.

Rise in scams across the UK banks

For the past five years, Mastercard has collaborated with UK banks to track how con artists use a series of mule accounts, frequently at many banks, to hide their activity. Due to this, Mastercard has been able to recognise patterns of behaviour and accounts linked to frauds that it has trained.

According to a report published by Seon, a fraud prevention tool provider has stated that such scams have increased by 64 percent in 2019 and reached £479 million in the UK in 2020. In addition, the research notes that 47 percent of all UK bank fraud instances involved online banking, along with explaining that each victim suffers an average loss of £600.