NEWSBYTE UK bank NatWest has claimed that it has prevented £7 million worth of false payments by using a machine learning system.
The bank deployed Mastercard-owned Vocalink Analytics’s Corporate Fraud Insights product. The system detects and alerts the bank about corporate payments, and is designed to prevent invoice redirection fraud, where businesses are duped into paying money into a fraudster’s account rather than to the intended recipient.
According to Vocalink and NatWest, the software has prevented losses of over £7 million to customers since its introduction last year, including individual attacks that could have lost companies hundreds of thousands of pounds.
“Detecting invoice redirection fraud is akin to finding a needle in a haystack, as there are tens of millions of legitimate non-real-time payments every day,” said Lee Fitzgerald, head of fraud for Commercial and Private Banking at NatWest. “But while the volume of fraud is relatively low, the values are typically large, so the business impact of this type of fraud can be crippling.
“Corporate Fraud Insights is part of our ongoing commitment to fighting payments-related fraud on behalf of our customers, helping businesses to stay safe and secure,” he added.
Vocalink Analytics’ executive VP Gary Kearns explained that the company applies sophisticated analytical techniques to vast amounts of payments data to build models that can identify suspicious activity.
“Every time a business pays an invoice, a behavioural signature is left behind. By analysing these signatures, and the signatures of historical frauds, we are able to identify and flag suspected incidents,” he said.
Internet of Business says
Fraud hits companies of every size, but can be most damaging to smaller enterprises.
For example, VocaLink’s 2017 SME Fraud Index found that nearly one-quarter (24 percent) of smaller companies reported attempts at invoice fraud. Where payment fraud did occur, 23 percent of businesses lost money. Of those, 26 percent said that they lost thousands of pounds, while nine percent reported losses of millions.
However, this isn’t the only AI technology that RBS-owned NatWest has been using to improve customer services. Last year, it trialled an AI compliance tool to improve and monitor the quality of the advice given during regulated customer conversations.
Meanwhile, Mastercard has been busy in another area of finance: redefining in-store shopping with a range of solutions that have helped retailers such as the Co-op and others to enable smartphone checkouts for their customers.