Fintech & Ecommerce

Mastercard Improves AI-Driven Fraud Defense

Mastercard is launching a partnership approach based on artificial intelligence to detect and prevent fraudulent activities involving the use of personal data and payments before the operations of criminals transform into victimizing consumers.

Mastercard Improves AI-Driven Fraud Defense

The mentioned giant of the payment industry on Wednesday, April 24, announced a new set of products to combat the implementation of AI applying scenarios presuming illegal purposes. In this case, it means deceiving consumers for further theft of funds.

Also on Wednesday, the giant of the payment industry announced several partners for joint activities to prevent the implementation of the mentioned scenarios for the use of artificial intelligence.

As part of a new initiative called Scam Protect, Mastercard is using AI to combat the application of this advanced technology for criminal purposes. In this case, the company combines its capabilities in areas such as identification, biometrics, open banking, and artificial intelligence. Mastercard has announced its intention to protect consumers from all types of internet scams and payment transaction scams.

FBI data shows that last year, residents of the United States lost $12.5 billion from fraud committed on the Internet. The media also reports that in the United Kingdom in the first half of 2023, cybercriminals committed almost 1.4 million thefts.

Chris Reid, Mastercard’s executive vice president of identification solutions, says that scammers are using next-generation technologies, which makes it increasingly difficult for consumers to recognize their activities. In this context, it was noted separately that fraudsters often impersonate those whom their victims trust.

The giant of the payment industry is launching Scam Protect, which includes two approaches to the product. Within the framework of Mastercard Identity it’s carried out verifies the authenticity of the user’s identity from the moment of making a payment transaction from account to account or by using the card.

The company also intends to provide real-time payment protection. As part of this anti-fraud solution, Mastercard provides analytical data to banks. The mentioned arrays of information help financial institutions detect and prevent money transfer operations to criminals. The fraud risk management system uses artificial intelligence to assist banks in real time to intervene in the transaction process and prevent it from being completed. In this case, the final stage of the operation involves transferring money to fraudsters.

A real-time anti-fraud solution is already being used by several financial institutions in the United Kingdom, including Natwest. Nick Elliot, head of the NatWest payment fraud unit, says that the method of criminals impersonating another person does not require hacking the security system, noting that in this case, the main action is to deceive the victim.

Mastercard also cooperates with organizations from other spheres of activity in the fight against the mentioned crimes. For example, the company will work with Verizon to develop new solutions to protect consumers from fraud in all areas of multi-channel attacks.

Mastercard also has a partnership with Entersekt, which specializes in financial authentication. In this case, the purpose of cooperation is solutions through which banks can step up transactions with a higher level of risk. As part of the mentioned solutions, financial institutions verify the sender’s biometric data to authenticate the operation.

It is worth noting that the personal awareness of consumers is also of particular importance in the fight against cybercrime. For example, a query in an Internet search system, such as how to know if my camera is hacked, allows anyone to get information about signs of unauthorized access to the device. Technical literacy is actually one of the tools to combat crimes committed in the digital space, including fraud.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.