Mastercard has un-veiled fraud management solution named Decision Intelligence (AI). The solution, it said, would use artificial intelligence technology to help financial institutions increase the accuracy of real-time approvals of genuine transactions and reduce false declines.
This is the first use of AI being implemented on a global scale directly on the Mastercard network. Decision Intelligence claims to go beyond focusing primarily on risk assessment by taking a broader view in assessing, scoring and learning from each transaction. That score then enables the card issuer to apply the intelligence to the next transaction.
“We are solving a major consumer pain point of being falsely declined when trying to make a purchase,” said Ajay Bhalla, president of enterprise risk and security, Mastercard. “By using AI technology on our global network, we’re helping financial institutions and merchants improve approval rates – and the consumer experience.”
Building on other proprietary services, Decision Intelligence claims to use sophisticated algorithms to provide a predictive score to the issuer, based on intelligent analysis. Issuers then incorporate that information into their existing fraud mitigation efforts. Alternatively, issuers can activate a Mastercard tool, which makes data-driven, real-time decisions tailored to the account, including defined alert and decline thresholds.
Decision Intelligence examines how a specific account is used over time to detect normal and abnormal shopping spending behaviors. In doing so, the product leverages account information like customer value segmentation, risk profiling, location, merchant, device data, time of day, and type of purchase made.
“We estimate that in the U.S. alone, the value of false declines is more than 13 times the total amount lost to actual card fraud,” said Al Pascual, senior vice president, research director and head of fraud and security at Javelin Strategy & Research. “Applying machine learning to decision-scoring is a new way of creating a positive consumer experience, while also minimizing fraud.”
The addition of AI as a core component of the Mastercard network is expected to deliver an enhanced fraud score for every transaction.
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