From car insurance to candy, and books to booking vacations, we spend increasing amounts of time and money on the internet. But the risks associated with transacting more and more of our lives in the digital world are escalating. The FBI says internet scams cost people in the United States $12.5 billion in 2023, and in the UK, fraudsters committed a crime roughly every 11 seconds—that’s nearly 3 million incidents of fraud in just one the year, according to UK Finance.
Help is at hand, though: Tackling the rising wave of financial crime, Mastercard is fighting scams using advanced AI technologies.
The company is fighting fire with fire. Whether it’s a romance scam or a too-good-to-be-true online deal designed to part you from your cash, fraudsters are harnessing AI to deceive their victims. Authorized Push Payment (APP) fraud is at the forefront of their playbook. It has quickly become the most prevalsent financial scam in the UK, costing the economy nearly £459.7 million ($589 million) in 2023. APP scams involve fraudsters persuading victims to transfer money to accounts they control, often under false pretences.
To combat the threat, Mastercard developed its AI-powered Consumer Fraud Risk Tool, which analyzes transactions for indicators of fraud, such as discrepancies in payment values, potential money-mule activities, and transaction patterns. The silent AI tool operates in the background, acting as a sentry that provides both the sending bank as well as the receiving bank with the insights they need to intervene before a questionable transaction takes place.
In 2024 we saw the tech adopted by more financial institutions, totalling 14 banks including TSB. Extrapolating TSB’s savings across the entire UK market, using Mastercard’s Consumer Fraud Risk Tool could prevent nearly £100 million in scam-related losses annually. “The primary benefit of the solution is its ability to use powerful AI and facilitate collaboration between banks, while protecting consumer privacy,” says Johan Gerber, Executive Vice President, Security Solutions at Mastercard.
It’s a sentiment echoed by Nicola Bannister, Director of Customer Support, TSB, who said the tech had helped the company enormously. “Spotting fraudulent payments among millions made every day is like finding a needle in a haystack, with scams becoming ever more complex—so prevention and monitoring tools are key.”
Recent data from 14 of the largest UK banks published by the Payment Systems Regulator showed a 12 percent reduction in the total value of APP scams from £389m ($520m) to £341m ($456m) across 2023.
It’s not just stopping APP fraud where AI can help. Mastercard’s AI systems are helping limit unauthorized fraud, where scammers use stolen information to secrete away money. The company’s Decision Intelligence (DI) technology helps banks evalsuate and approve transactions at scale, enhancing fraud detection rates by up to 300 percent in some cases. Blocking a fraudulent transaction attempt can take just 50 milliseconds using the DI system. “Scammers are exploiting new technologies, making their deception and impersonation scams increasingly difficult for consumers to recognize,” says Gerber. But Mastercard can utilize those tools, too.
And while scammers are using generative AI to scale up their attempts to trick customers, Mastercard is using the same tech to protect. Using synthetic transaction data, Mastercard can train their systems to detect and respond to new types of fraud as they crop up. Generative AI has also streamlined the creation of Anti-Money Laundering (AML) reports, while reducing the risk of human error.
Mastercard recognizes that fighting scams can’t be done alone. So, it has partnered with organizations across the ecosystem to enhance their fraud prevention capabilities alongside working with the Global Anti-Scam Alliance (GASA), which protects consumers worldwide from scams by bringing together a diverse group of stakeholders to share insights and knowledge surrounding scams. Mastercard has partnered with companies such as Verizon Business to collaboratively engage in developing advanced tools for blocking scammers.
Taking the fight to scammers is a global endeavor. In the UK, banks such as NatWest are already using Mastercard’s Consumer Fraud Risk solution, while Mastercard is collaborating with companies like Entersekt, a global leader in financial authentication to step-up high-risk transactions using behavioral biometrics before funds are transferred.
Finding the right technology with which to defend the digital ecosystem is a constant uphill challenge, with Mastercard fighting on all fronts. But it’s all in aid of one goal, says Gerber. “This holistic approach means more people will be protected,” he says, “fostering trust in our digital world.”
