Mastercard leverages AI in a potent alliance to combat crypto fraud with advanced fraud detection
Mastercard is intensifying efforts to detect and combat cryptocurrency fraud by collaborating with Feedzai, a regulatory technology platform leveraging artificial intelligence (AI) to combat online money laundering and financial scams. In an exclusive statement to CNBC, Mastercard revealed the partnership, aiming to enhance fraud prevention through integration with Feedzai’s technology. Feedzai will directly embed Mastercard’s CipherTrace Armada platform, which monitors transactions from over 6,000 crypto exchanges, enabling real-time alerts on suspicious activities. The move underscores Mastercard’s commitment to legitimizing crypto within mainstream financial frameworks and compliance standards.
Through this collaboration, Feedzai’s AI capabilities will play a pivotal role in bolstering Mastercard’s fraud detection efforts. Feedzai’s RiskOps platform, processing transactions exceeding $1.7 trillion annually, boasts the ability to identify and block suspicious transactions within nanoseconds, while also distinguishing legitimate transactions. This integration addresses the evolving landscape of crypto-related fraud, with an estimated 40% of scam transactions funneling directly from bank accounts to crypto exchanges, according to Feedzai data.
Nuno Sebastio, Feedzai’s CEO and co-founder, highlighted the potential impact of the partnership, emphasizing the ability to not only safeguard consumers but also detect money laundering activities and exploit mule accounts. Sebastian pointed out that some banks, believing they prevent illegitimate crypto transactions, might inadvertently omit transactions involving less recognized or regulated entities within the crypto space.
Mastercard’s strategic move aligns with broader industry trends as traditional financial institutions, including banks, explore incorporating crypto into their offerings. Despite increasing interest, concerns persist regarding the lack of comprehensive regulations and the susceptibility of digital assets to fraud and scams. The partnership with Feedzai positions Mastercard to navigate these challenges and provide financial institutions with tools to discern between legitimate and fraudulent crypto transactions.
The announcement builds upon Mastercard’s acquisition of CipherTrace in 2021, showcasing a commitment to addressing crypto-related fraud. The collaboration with Feedzai signifies a proactive approach to harnessing AI capabilities for real-time fraud prevention, aligning with Mastercard’s broader initiatives in the crypto space.
Ajay Bhalla, President of Cyber and Intelligence Solutions for Mastercard, emphasized the significance of the partnership in the context of evolving financial risks. Bhalla highlighted that fraud in transactions involving crypto is reportedly five times higher than in traditional fiat transactions. With the Feedzai collaboration, financial institutions leveraging Mastercard’s network gain enhanced capabilities to differentiate between legitimate and fraudulent transactions, contributing to a safer financial ecosystem.
