The new advanced AI model from Mastercard, Decision Intelligence Pro, will allow banks to better assess suspicious transactions on its network in real time and determine whether they’re legitimate or not. Company officials explained that the new AI solution is a proprietary recurrent neural network — a core part of generative AI — built from scratch by the company’s cybersecurity and anti-fraud teams.
Mastercard’s proprietary algorithm is trained on data from the roughly 125 billion transactions that go through the company’s card network annually. The data helps the AI understand relationships between merchants — rather than words, as is the focus with large language models such as OpenAI’s GPT-4 and Google’s Gemini — and predict where fraudulent transactions are taking place, Mastercard said.
Discovering fraud patterns
Instead of textual inputs, Mastercard’s algorithm uses the history of a cardholder’s merchant visit as the prompt to determine whether the business involved in a transaction is a place the customer would likely go. The algorithm then generates pathways through Mastercard’s network to find the answer in the form of a score.
A higher score would be one that follows the pattern of what’s the usual kind of behaviour expected from the cardholder, and a lower score is out of that pattern. This process all happens in just 50 milliseconds and can improve fraud detection rates by 20%-30%, according to Mastercard.
Strategic investments in cybersecurity and AI
The payments company says it’s invested more than USD 7 billion in cybersecurity and AI technologies since 2019. That includes a number of acquisitions, including its March 2023 deal to buy Swedish cybersecurity firm Baffin Bay Networks.
While it’s still early, Mastercard anticipates its algorithm will enable banks to save as much as 20%, by eliminating much of the costs they’d typically devote to assessing illegitimate transactions.
The true potential of Mastercard’s technology, according to company officials, is in the ability to identify fraudulent patterns and trends to predict future types of fraud that are not currently known within the payments ecosystem. The officials added that the beauty of Mastercard’s ecosystem is seeing data from all their customers globally from these transactions. What that does its it helps them discover fraud and patterns across the ecosystem globally.
