Let’s break down generative AI to understand Mastercard’s use of the technology.
What is generative AI?
Generative AI excels at spotting unusual patterns. It notes normal behavior like spending habits or login times. When something doesn’t fit this pattern, it flags it as potentially suspicious. For example, if someone suddenly starts buying expensive items they’ve never bought before, the AI might raise an alarm.
The role of generative AI in fraud detection
Generative AI helps catch fraudsters by learning from past fraudulent and normal payment activities. It studies data to understand the normal card payment process and user habits.
Through generative AI, businesses can fight fraud effectively. Fraud cases are often numerous, making it hard for computers to learn what fraud looks like.
Generative AI creates fake fraud examples to even things out, improving the computer’s ability to detect real fraud. Businesses can then prepare for attacks by imagining different fraud scenarios generated by the AI tools. They can simulate various fraud types to test security systems. More businesses are using AI to improve their security, while others simply adopt service providers that keep their networks secure.
The dark world of card theft
Cybercriminals use various tactics to steal payment card numbers. Spyware, a stealthy malicious software, infiltrates computer devices to capture sensitive payment information. Malware, another harmful program, may steal the user’s data and damage the user’s device. These digital threats silently steal card details from unsuspecting victims.
Fraudsters may also engage in physical deception, such as skimming. Card skimming involves installing hidden devices on ATMs or point-of-sale (POS) terminals to capture card information, when people swipe their cards. The skimmers are often undetectable to the naked or untrained eye.
With the stolen data, criminals create counterfeit cards or sell the information on the black market. The illicit trade contributes to a thriving black market, where stolen identities and financial ruin become commodities. The consequences for victims are devastating as they grapple with identity theft, fraudulent charges, and the laborious process of restoring their financial reputation.
Mastercard’s move to prevent losses from compromised cards
Mastercard’s generative AI rapidly scans transaction data from billions of cards and millions of merchants, identifying fraud patterns more efficiently than ever before. The process enables Mastercard to detect new and complex fraud trends quickly. With the help of predictive technology powered by generative AI, Mastercard anticipates and addresses emerging threats, protecting future transactions.
Using generative AI-based predictive technology allows Mastercard to protect future transactions against emerging threats by:
- Doubling the detection rate for compromised cards.
- Decreasing false positives in identifying fraudulent transactions by 200%.
- Speeding up merchant risk identification by 300%.
Traditionally, fraudsters have exploited various methods like malware and card skimming to steal card details. Often, they only sell fragments of these stolen numbers on the dark web. Mastercard’s generative AI solution, however, predicts the complete card details based on these fragments.
Armed with this enhanced intelligence, Mastercard alerts banks to potential card compromises, enabling them to block and reissue cards promptly. Continuous monitoring of compromised cards further bolsters fraud prevention and reinforces trust in the payment ecosystem.
Johan Gerber, a Mastercard representative