Financial services providers are increasingly turning to Generative AI (Gen AI) to enhance their fraud protection capabilities. In a recent move, Mastercard has launched Decision Intelligence Pro (DI Pro), a Gen AI consumer protection tool that determines transaction risk by assessing entity relationships. Meanwhile, neobank Revolut has announced the launch of an AI-based, advanced scam detection feature to help protect its customers from malicious card scams.

GlobalData 2023 Financial Services Consumer Survey

GlobalData’s 2023 Financial Services Consumer Survey indicates that 22% of US customers have been a victim of financial fraud in the last three years, six percentage points (pp) above the global average of 16%. Looking deeper into the data for US customers, the most common type of financial fraud was from card details being stolen on the internet. 19% of all fraud cases in 2023 were in this form, up from 13% in 2022. In the UK, where Revolut is headquartered, the same form of fraud is the most common, also having an occurrence rate of 19%. The second-most common type of financial fraud was authorized push payments (APP), which accounted for 16% of all cases in 2023, up 3pp from 2022.

The introduction of DI Pro builds upon Mastercard’s existing DI tool, a real-time decision-making solution facilitating the assessment and secure approval of more than 143 billion transactions annually within the banking sector. With the launch of DI Pro, the platform will reportedly now harness an unparalleled volume of 1 trillion data points to accurately predict the likelihood of transaction authenticity or falsity in real time.

Mastercard Decision Intelligence Pro: accessible to all banks by year end

Despite the significant scale of data processing involved, the Gen AI technology achieves rapid processing, typically completing scans and delivering comprehensive safety assessments in less than 50 milliseconds. According to Mastercard, initial predictions indicate large improvements in fraud detection rates, with AI-driven enhancements expected to yield an average increase of 20% and up to 300% in select scenarios. Mastercard hopes to make DI Pro accessible to banks and financial providers later this year.

Revolut has introduced its own AI fraud protection measures to ensure better security for its customers. The AI protection functionality assesses the probability of a customer’s card transaction being fraudulent by automatically rejecting suspicious transactions to safeguard customers.

In case of potential scams, customers are guided through an intervention process within the Revolut app. During this process, they are prompted to furnish additional transaction details, enabling Revolut to effectively discern whether the customer was potentially being misled by a scammer into authorising the payment.

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With the increase of both APP fraud and card details being stolen in the UK and US, it is no surprise that global financial services providers are looking at improving their fraud protection measures and turning to AI to help achieve this. The risk of fraud is not likely to diminish anytime soon, with new EU regulations now allowing instant cross-border payments throughout member states. The fast rate at which instant payments are settled means that fraud must be detected in milliseconds. As digitalisation continues, other financial service providers and fintechs will leverage the use of Gen AI in their fraud prevention measures.

Harry Swain is an associate analyst, GlobalData