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Deutsche Bank has partnered with payments behemoth Visa to strengthen its online retail fraud prevention resources.
The collaboration makes Visa-owned company Cybersource’s automated fraud detection system, Decision Manager, available to merchants who process their e-commerce payments via Deutsche.
With Decision Manager, merchants will benefit from artificial intelligence-based calculations of risk value for each transaction to discover patterns and strategies.
The application leverages an advanced risk model and global data intelligence from billions of data points of the Visa network to block fraudulent transactions and accelerate verified ones.
According to Cybersource, Decision Manager prevented the equivalent of more than $22bn in potential fraud worldwide in 2021. Its website states that the company screened 2.2bn transactions that same year.
“With the increasing volumes and associated costs of cyber-related attacks, the Visa solution Cybersource helps Deutsche Bank to resolve the tension between making payments easy and keeping their client’s business safe,” said Denise Burkett-Stus, head of Cybersource Europe.
“By pairing key insights from experienced managed risk analysts with a battle-tested decision engine, we are able to build safety and convenience into the fabric of every payment experience.”
Cybersource is an online payment and fraud management platform serving over 450,000 businesses around the world. Established in 1994, the company was acquired by Visa in 2010 for $2 billion.
AI and data analytics power anti-fraud technology
The collaboration between Deutsche and Visa marks another partnership between a financial firm and a tech provider to boost the former’s defence capabilities against fraudulent activities.
In August, Zurich Cantonal Bank selected Swiss fintech security company NetGuardian to use the latter’s fraud-prevention software.
Like Decision Manager, NetGuardian’s technology also relies on artificial intelligence to safeguard its customers.
AI and data analytics are among the most popular tools deployed by organisations to detect fraudulent activities.
According to the 2022 Anti-Fraud Technology report by the Association of Certified Fraud Examiners and SAS, the use of artificial intelligence in the anti-fraud program is expected to more than double over the next two years.
The report also highlighted that 43% of organisations increased their use of data analytics in response to the Covid-19 pandemic.
Fraud losses get more expensive
The investment in security tools comes amid the increasing losses incurred by organisations as a result of fraudulent attacks.
A 2022 global fraud and payments report by Cybersource revealed that e-commerce companies lost 3.6% of their revenues to payment scams globally, up from the 3.1% recorded in the previous year.
In a separate 2022 study by LexisNexis, the research revealed that every $1 of fraud costs US retail and eCommerce merchants $3.75, 19.8% higher than the pre-covid study in 2019.
Juniper Research estimates that online payment fraud losses will exceed $343bn globally between 2023 and 2027.
Although the research figures on losses have been dismal, there has been reports of a slight drop in fraudulent transactions.
According to the Payments Fraud and Control Report by JP Morgan, a survey of 552 corporate practitioners revealed that a 3% drop in the percentage of organisations that were victims of scam attacks/attempts in 2021. The figure was 74% in 2020.
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