Payment giant Mastercard says it has developed an artificial intelligence model that can help thousands of banks on its network detect and eliminate fraudulent transactions.
A new advanced AI model called Decision Intelligence Pro enables banks to better assess suspicious transactions on their networks in real-time and determine whether they are legitimate.
The new AI solution is Mastercard's proprietary recurrent neural network, developed by the company's cybersecurity and anti-fraud teams.
Mastercard uses a transformer model that essentially helps harness the power of generative AI.
The company built everything for the new solution itself, integrating all kinds of data from the ecosystem.
Due to the nature of the company's business, it collects all transaction data from the ecosystem.
Although Mastercard develops most of its technology internally, in some cases Mastercard uses open source when necessary.
Mastercard trains its algorithm using data from about 125 billion transactions made across the company's card network each year.
Unlike large, text-oriented language models, Mastercard's AI solution focuses on understanding relationships between merchants and predicting where fraudulent transactions occur.
Mastercard's algorithm uses the cardholder's merchant visit history as a guide, rather than text input, to determine whether the business involved in the transaction is located in a location a customer is likely to visit.
The algorithm then journeys through the Mastercard network to find the answer in the form of a score.
The score will be higher if you follow the usual pattern of behavior expected of the cardholder; The result will be lower if this model is not respected. All this happens in just fifty milliseconds.
Mastercard's new transaction decision-making technology helps financial institutions increase average fraud detection rates by 20%.
In some cases, the model has improved fraud detection rates by up to 300%.
Mastercard said it has invested more than $7 billion in cybersecurity and artificial intelligence over the past five years.
Competitor Visa is investing in AI and, among other things, is creating a $100 million venture capital fund for AI startups.
MasterCard hopes that its algorithm will save 20% of its financial resources by eliminating many of the costs that banks usually incur to evaluate illegal transactions.
Many payments and digital banking companies say AI could lead to big changes in their products.
Last week, PayPal announced new products powered by artificial intelligence.