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Mastercard deploys AI arsenal to combat $12.5B scam epidemic

Mastercard introduces ‘Scam Protect’ to combat the rise in digital scams, using AI, biometrics, and open banking to secure transactions and consumer data against a backdrop of increasing financial fraud.

  • Editorial Team
  • April 26, 2024
  • 4 minutes

As digital innovation accelerates, so does the sophistication of scams, posing a threat to the financial security of consumers worldwide. In response to this rising tide of deception, Mastercard introduces Scam Protect, a suite of AI-driven tools, and forges industry partnerships to tackle fraudulent activities, mitigate their impact, and educate consumers.

With internet scams in the United States resulting in a staggering $12.5 billion loss in 2023 alone, and the UK witnessing nearly 1.4 million thefts in just the first half of the same year, the urgency for a comprehensive digital fraud-defense mechanism has never been greater.

By harnessing the power of artificial intelligence, biometrics, and open banking technology, Mastercard’s Scam Protect creates a multi-layered shield against various forms of financial deception, including card-based fraud, account-to-account scams, and illegitimate account openings.

With this initiative, Mastercard aims to proactively identify and neutralise threats, secure digital transactions and protect consumers from the impacts of financial fraud.

“Scammers are exploiting new technologies, making their deception and impersonation scams increasingly difficult for consumers to recognise,” commented Chris Reid, EVP of identity solutions at Mastercard. “Building on our innovations in AI and key partnerships, we are supporting financial institutions with insights to better detect and prevent scams, while helping consumers learn how to spot them.”

Strategic partnerships

Mastercard has also forged strategic alliances with industry partners. A key partnership with Verizon exemplifies this synergy, combining Mastercard’s identity insights with Verizon’s network technologies. This collaboration aims to enhance the precision of scam detection across communication channels, and effectively address emerging cybersecurity threats before they reach consumers.

“The security landscape is constantly evolving, as are scammers’ techniques, but one constant has been social engineering – using texts and phone calls to coerce people,” said Kyle Malady, CEO, Verizon Business. “Verizon and Mastercard share a commitment to helping protect consumers from security threats. By combining our expertise, we’re building solutions to identify and thwart scammers before they initiate contact.”

Mastercard’s initiative has also extended into the banking sector with its AI-powered Consumer Fraud Risk technology. In the UK, NatWest stands as a pioneer, being among the first to implement this technology to safeguard funds from being siphoned by scammers.

Nick Elliot, NatWest’s head of payment fraud, acknowledges the escalating sophistication of scams and the necessity of advanced fraud monitoring and prevention measures.

Nick Elliot, head of payment fraud, NatWest, commented: “As the sophistication of scams has progressed, so has our real-time monitoring and prevention of fraud. Together with Mastercard, we are using the power of AI to identify payments to fraudsters and stop them before money is lost. In combination with our programme of consumer education and guidance on precautions, we are enhancing the safeguards for all our customers.”

Mastercard has also teamed up with Entersekt, a global financial authentication company. Entersekt uses Mastercard’s behavioural biometrics to provide better security for high-risk transactions. It verifies the biometrics of the sender to authenticate each transaction and protect them from potential fraud before the funds leave their bank account.

Consumer education and protection

Mastercard’s battle against scams goes beyond mere technological solutions, being a supporting member of the Global Anti-Scam Alliance. By joining forces with the Alliance, Mastercard contributes its expertise and innovative technology to a worldwide network committed to halting scams. The partnership is pivotal in fostering consumer education, empowering individuals with the knowledge to recognise and resist fraudulent schemes.

Mastercard’s involvement with the Alliance also includes the establishment of a chapter in Singapore, furthering regional efforts to safeguard consumers.

“We are pleased to welcome Mastercard to the Global Anti-Scam Alliance,” said Jorij Abraham, managing director, Global Anti-Scam Alliance. “Mastercard’s industry expertise and innovative technology will support our global network’s commitment to stopping scams and protecting consumers. We look forward to our continued collaboration in educating and empowering consumers worldwide.”