UK Banks Sign to use AI-Powered Consumer Fraud Risk System, Helping to Spot Scams

The biggest banks in the United Kingdom have recently signed up to use the Consumer Fraud Risk system, helping to predict whether someone is trying to transfer funds to an account affiliated with push payment scams.

Signing Up with Mastercard

Mastercard introduced a new AI-powered tool to help banks detect if their customers are sending money to scammers. According to a report from Bloomberg, nine of the biggest banks in the United Kingdom have already signed up with the company for the new tool, with plans to roll it out globally in the near future.

Among the biggest banks are Lloyds Group, Natwest Group, Bank of Scotland, Halifax, Monzo, and more. The Consumer Fraud Risk system was trained on years of transaction data, helping to predict whether someone is trying to transfer funds to an account affiliated with Authorized Push Payment (APPs) scams. TSB Banking Group became the first bank to implement the system four months ago.

TSB Fraud Head Paul Davis stated that through this implementation, they saw one of the biggest improvements of any individual fraud prevention as he has seen a 20% increase in detection. TSB also estimates that this could save the industry about $108.4 million per year if the tool was rolled out across the market.

Scamming through Transactions

These types of scams usually involve tricking victims into transferring money to an account falsely posing as a legitimate payee, including a family member, friend, or business. Hence, why the tool was launched. Mastercard Cyber and Intelligence President Ajay Bhalla stated that this became a huge problem that banks have been struggling with for the longest time.

Finextra reported that this will work by assigning a risk score from 0 to 999 on any attempted bank transfer within half a second. The risk score and the bank's own analytics will have the ability to create an assessment. Additionally, banks in the UK also prepare for new restrictions from the regulators of Payment Systems. This will require banks to compensate customers affected by aPP scams starting in 2024.

Mint reported that Mastercard has been working with banks in the United Kingdom to follow how scammers move their proceeds through a sequence of mule accounts to investigate their activity. These are also often at several different banks.

As of the moment, the company is still discussing plans to roll out the tool globally, featuring real-time payment systems and significant APP fraud. Among the potential clients were from the United States, India, and Australia.

In recent news, Mastercard also partnered with video game-e-commerce company Xsolla to facilitate the easiest and more secure payments in online gaming. Through this partnership, both companies promised to make it easier for players to make purchases and obtain rewards without any hassle, including credit card benefits, in-game currency trading, and streamlining.