Piloting AI for Enhanced Fraud Detection in Payments: Swift’s Collaborative Approach
Swift, in collaboration with its global community, is launching two pilots to test the practical application of AI in enhancing fraud detection in payments. The initiative aims to leverage AI to combat financial crime and improve the cross-border payments ecosystem.
As financial service providers face increasing fragmentation, new regulatory requirements, and evolving external threats, AI emerges as a crucial tool for enhancing existing processes and delivering insights to elevate offerings.
With global fraud costing $485 billion in 2023, the need for effective fraud detection is more critical than ever. Swift’s pilots aim to demonstrate AI’s potential to significantly reduce fraud in the financial industry.
The first pilot involves enhancing the Payment Controls Service with AI-based algorithms to better detect fraud in transactions. The pilot will include five Payment Controls customers, such as India’s Axis Bank, and will use live, in-production traffic data for real-world application.
The second initiative focuses on creating a pan-industry defense against fraud through global information sharing and collaboration. Ten leading financial institutions, including BNY Mellon, Deutsche Bank, and HSBC, will trial the use of secure data collaboration and federated learning technologies to share intelligence and improve fraud detection capabilities.
Swift is committed to the responsible use of AI, ensuring accuracy, explainability, fairness, auditability, security, and privacy in its applications. The organization is aligned with emerging global standards and leverages AI internally to enhance productivity and deliver value to its members.
Industry participants have welcomed the initiative, highlighting the importance of collaboration, collective action, and leadership in combatting fraud. They see these initiatives as a way to enhance fraud detection, reduce operational costs, and deliver a premium customer experience.
The initial findings of these pilot initiatives will be presented at Sibos in October, showcasing the power of collaboration in creating solutions that raise the bar in the fight against fraud.