Payment giant Mastercard has joined forces with Feedzai, a data science company specializing in fraud protection solutions to combat crypto fraud and boost crypto security, according to Feedzai’s press release on November 20.
The solution to combat crypto fraud that often outsmarts investors is acting swiftly. Mastercard and Feedzai are addressing this challenge with the power of AI.
In an interview with CNBC, Mastercard said the partnership would harness both parties’ expertise in crypto security and artificial intelligence (AI) to analyze transaction data and identify fraudulent activity.
New Ways To Stay Safe
Through this partnership, Feedzai’s RiskOps platform will incorporate Mastercard’s advanced crypto intelligence solution, Ciphertrace Armada, to enhance the effectiveness of anti-money laundering (AML) measures.
This integration will empower financial institutions to swiftly intervene and block high-risk and potentially fraudulent transactions on crypto exchanges before criminals can transfer funds out of the exchange.
Analyzing an annual transaction volume exceeding $1.7 trillion, Feedzai’s RiskOps platform currently safeguards the financial activities of over 900 million consumers globally. The primary objective of this partnership is to equip these customers with advanced tools for the real-time detection and prevention of transactions involving fraudulent crypto exchanges.
The move aligns with Mastercard’s recent introduction of a novel solution designed to assist banks in identifying scams within account-to-account payments. AI plays an influential role in Mastercard Consumer Fraud Risk’s mission to empower banks to provide additional security for customers.
Nuno Sebastião, CEO of Feedzai, underscores the global partnership’s significance in enabling banks to shield their customers from the evolving challenges of sophisticated criminals and the advancing money laundering techniques associated with crypto transactions.
Meanwhile, Ajay Bhalla, President of Cyber and Intelligence at Mastercard, expresses enthusiasm about reinforcing trust in the digital ecosystem. The collaboration seeks to furnish financial institutions with vital insights to prevent fraudulent crypto exchange transactions, ultimately delivering enhanced security and choices for customers.
Founded in 2011, Feedzai is a regulatory fraud detection software provider powered by machine learning. The company previously disclosed its partnership with Amazon Web Services to develop a high-performance, cloud-based infrastructure to augment its real-time fraud detection capabilities.
AI and Crypto: A Solid Team?
Mastercard has been actively involved in the crypto sector since the start of 2023. The firm entered into a partnership with crypto payment app MoonPay in October to tap into Web3’s potential.
Furthermore, Mastercard has reportedly tested tokenized bank deposits with further plans for central bank digital currencies (CBDCs) and regulated stablecoins.
In addition to Mastercard, major players in the payment sector, such as Visa or PayPal, have steadily explored new offerings integrated with cryptocurrency. However, a lack of transparent regulations and a maze of scams within the industry have slowed the adoption.
Like cryptocurrency, AI is also the current headline, as its power has the potential to revolutionize many industries.
Controversies aside, both era’s products can make a solid team, especially regarding fraud detection. AI can be trained to improve cybersecurity, identify and flag suspicious transactions, and prevent them from being completed.
Over time, AI’s expanding capabilities will bring about a range of benefits, not just in asset protection. AI and crypto can be used to create new financial products and services that are more efficient, transparent, and accessible.
With this synergy, we can anticipate advancements in computation, leading to reduced network latency and faster transactions.
With right training comes greater management. AI data pruning algorithms can also be used to optimize blockchain data, automatically eliminating unnecessary data for future use.
AI can also introduce new decentralized learning systems, such as federated learning or novel data-sharing techniques, significantly enhancing system efficiency. However, AI isn’t perfect. It is a new technology, and should not be trusted blindly.
