Mastercard’s new AI-powered network for stopping a particularly brutal type of scam could save UK banks about £100 million per year.
Nine British banks are betting on Mastercard’s new Consumer Fraud Risk platform, which flags risky transactions to prevent authorized push payment scams in real-time.
As the UK prepares to roll out regulation to require banks to reimburse victims of authorized push payment (APP) scams, Mastercard is stepping up to the plate with new fraud fighting technology.
APP scams, where victims get swindled into willingly sending money to bad actors under false pretenses, is particularly hard to police and accounts for 40% of UK bank fraud losses, according to Mastercard. Its algorithm – trained on years of account-to-account transaction data – flags and blocks suspicious transactions before money leaves a potential victim’s account.
Since early tester TSB started using the system four months ago, it has detected 20% more APP fraud and estimates that the tool could save UK banks about £100 million per year. “It’s a good example of the power of sharing data,” according to head of fraud Paul Davis.
Eight other big UK banks have signed up, including Lloyds and NatWest, and Mastercard plans to roll out the tool globally in the coming months. Meanwhile, 17 Australian banks launched a similar fraud reporting network earlier this year.