Swift, the secure financial messaging service provider, is rolling out new AI-enhanced fraud detection to help the global payments industry improve its defence as bad actors become increasingly sophisticated.
The new fraud detection capability builds on Swift’s existing Payment Controls Service – used by many small and medium-sized financial institutions – by drawing on pseudonymised data from the billions of transactions that flow over the Swift network each year to identify and flag suspicious transactions so that action can be taken in real-time.
Swift says the new fraud detection capability will be available from January 2025, and is the result of extensive collaboration with banks from around the world and a successful pilot earlier this year.
Jerome Piens, chief product officer at Swift, said: “Bad actors are using increasingly sophisticated tactics to commit financial crime, and the global financial industry needs to raise its defences higher to ensure their customers can continue to transact globally with confidence. Swift has a long track record of supporting our community by staying one step ahead to maintain the security and resilience that our network is known for and now we’re doing so again by harnessing the latest technology.”
The rollout is part of Swift’s broader collaboration with its global community of more than 11,500 banks and financial institutions to test how AI can solve cross-industry challenges. With global industry estimates putting the total cost of fraud in financial services at $485billion in 2023 alone, Swift says it is focused on using AI to give financial institutions stronger and more accurate insights into instances of potentially fraudulent activity.
The key is collaboration
Since February, Swift worked with leading global financial institutions to explore how federated learning, combined with privacy-enhancing technologies, could enable market participants to share information without revealing their proprietary data.
“Collaboration across the banking sector is crucial to enhancing fraud detection, and by sharing data and leveraging AI, we empower ourselves to stay ahead,” explained Olivier Nautet, head of cybersecurity at BNP Paribas. “At BNP Paribas, we are fully committed to supporting Swift’s innovative initiative in that regard, as it marks a key step forward in protecting the integrity of our financial ecosystem.”
John McHugh, head of operations control – CIB at Standard Bank, also added: “Standard Bank Group, Africa’s biggest bank by assets, has participated in Swift’s initiative for AI fraud detection capability to enhance the security of its customers’ transactions. The technology will identify suspicious patterns in real-time, reducing fraud risk and ensuring a safer banking experience for clients.
“By leveraging the power of AI, Standard Bank Group reaffirms its commitment to innovation and safeguarding the financial assets of its clients – who are our main asset.”
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