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accurately, it also has been shown to reduce the number of
Insider’sreport false positives by better than 85 percent, Mastercard said.

on payments "With generative AI we are transforming the speed and
accuracy of our anti-fraud solutions, deflecting the efforts
of criminals," said Ajay Bhalla, president of cyber and
intelligence at Mastercard. "Supercharging our algorithm
AI: A double-edged will improve our ability to anticipate the next potential
fraudulent event, instilling trust into every interaction."
sword For its part, Visa introduced an AI product designed to

combat token fraud. It's a value-added service that uses

request for token provisioning. Tokenization is a fraud-
By Patti Murphy machine learning tools to rate the likelihood of a fraudulent
ProScribes Ink fighting technology that helps protect sensitive account
information from fraudsters by replacing it with unique
ere's an old story that some younger readers codes. However, tokens can be illegitimately provisioned.
may not recognize, but what the heck. Willie Visa pegs losses to such frauds at $450 million in 2022 alone.
Sutton, a bank robber from the early 20th
H century was famously asked why he robbed Visa also now offers real-time account-to-account
banks. His reply: because that's where the money is. protection, powered by deep learning AI models.
AI-generated fraud on the rise
Today, of course, a crook doesn't need to go inside any
bank buildings, as there are ample ways to steal money But are these tools enough? Because, after all, there are
from banks and their customers—online and other ways. plenty of Willie Sutton wannabes in the digital world. The
With more of our financial lives going digital, we face more latest boom, one targeted by Mastercard, identifies fake
risk than ever. That is why it is critically important that the identities that are created using AI. Fraud cases involving AI-
card brands, issuers and acquirers protect transaction and generated identities rose 17 percent between 2021 and 2023,
cardholder information. and three quarters (76 percent) of financial professionals
are fairly certain their companies have approved customers
These days, artificial intelligence is a go-to tool for fraud and who presented synthetic IDs, according to research by the
risk management, just as it has become a go-to technology fraud prevention company Deduce.
for crooks. That's what makes AI a double edge sword.
The Deduce research also found that fraud and risk
Mastercard and Visa both recently rolled out several new professionals expect the problem to worsen before it can
AI-based services. Mastercard, for example, announced be contained with an effective solution. "Synthetic identity
that it is adopting generative AI techniques to boost its fraud has long been a significant challenge for the financial
network security posture. industry, but the advent of AI technology has accelerated
the problem," said Ari Jacoby, Deduce's CEO. "Fraudsters
Generative AI is a type of artificial intelligence that can are now able to create identities at an unprecedented pace,
produce fake content, including text, imagery and audio, allowing them to play the long game with those personas."
that is hard to detect as artificial. In a common fraud
scenario, generative AI is used to produce a polished Once a fraudster creates a synthetic identity in the credit
phishing email—one devoid of typos and poor grammar, reporting apparatus, they start taking out loans and credit
both of which are telltale signs most recipients use to weed lines they have no intention of repaying. Cost estimates vary,
out obvious phishing expeditions in seconds. but better than one third of risk professionals surveyed put
the average cost of a synthetic fraud incident at between
The latest update to Mastercard's real-time decisioning $25,000 and $100,000. Nearly a fourth (23 percent) put the
solution can scan an unprecedented 1 trillion data points to cost north of $100,000.
predict whether a transaction will go south. Mastercard said
this enhancement builds on its existing ability to analyze Perhaps one of the most sobering findings was that despite
account, purchase, merchant and device information in all the time, money and effort the industry is putting into
real time. developing fraud defenses, just over half (52 percent) of risk
professionals surveyed feel fraudsters are adapting faster
The technology assesses relationships between multiple than financial organizations.
entities surrounding a transaction to determine its risk—in
less than 50 milliseconds, Mastercard said in a press release Consumer concerns run deep
that initial runs suggest fraud detection improvements
averaging 20 percent, and at times as high as 300 percent. Consumers are especially concerned about AI-based fraud
Not only does the upgrade identify bad transactions more attacks. A 2023 consumer survey fielded by Prove Identity,
a digital identity platform, found 72 percent knew what
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