Mastercard Launches AI-Powered Anti-Money Laundering Service 'Trace' in Asia Pacific

Mastercard launches AI-powered AML service in Asia Pacific

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Powered by large-scale payments data from multiple financial institutions, Trace provides holistic intelligence beyond an individual firm's siloed view, enabling tracing of crime across a payments network. Mastercard notes that the rise of real-time payments in Asia Pacific has attracted money launderers and "mules", who try to evade detection by moving funds rapidly between multiple accounts. Financial institutions have largely relied on semi-manual methods or in-house AI to detect these illicit patterns, but these typically rely on their own data and lack the holistic, network-level perspective needed to trace such far-reaching criminal activity. The payments giant says its new offering uses data science techniques to trace potentially fraudulent transaction patterns across a network, as well as providing proactive alerts to banks about suspicious accounts. The firm has already rolled out the technology in the UK, where it is being used by 21 firms covering 90% of the country's Faster Payments Service network The Philippines is the first Asia Pacific country to get Trace, where Mastercard has worked with local interbank network BancNet, which has so far onboarded 36 domestic lenders. Matthew Driver, EVP, services, Asia Pacific, Mastercard, says: "By ensuring that transactions remain secure and compliant, Trace helps to protect consumers and financial institutions, while also fostering trust in the digital economy -- which will be critical for the region's economic growth."

Mastercard Launches Tool to Help Firms Trace Money Laundering | PYMNTS.com

TRACE uses "timely and large-scale payments data from multiple financial institutions" to provide intelligence beyond a "financial institution's siloed view," allowing financial crime tracing across payment networks, according to a Thursday (Feb. 13) news release. Consumers and businesses in APAC are increasingly using real-time payments to settle accounts within seconds rather than days, per the release. "However, this speed has also made it a target for money launderers and 'mules,' who try to evade detection by moving funds rapidly between multiple accounts," the release said. "Oftentimes, criminals also involve the accounts of unwitting civilians through methods such as romance and investment scams." Financial institutions have typically used "semi-manual" methods and in-house artificial intelligence to detect crime, but often lack a "network-level perspective" to track far-reaching crime, according to the release. "TRACE incorporates critical data points across an entire domestic network to identify money mules involved in financial crime ... giving financial institutions a network-level perspective they wouldn't otherwise have," the release said. The first APAC rollout of TRACE was in the Philippines in partnership with interbank network BancNet, which onboarded 36 domestic banks, per the release. Also on Thursday, PYMNTS posted an interview with Mzukisi Rusi, vice president for product development: authentication products at Entersekt, about the threat of account takeovers to banks and their customers. Criminals use advanced technology to pose as legitimate individuals, which furthers their ability to keep victims and banks from knowing they've been compromised. A multifaceted approach to fraud prevention is required, and part of this approach is getting away from passwords, including one-time passwords, because credential attacks are still the top cause of account takeovers, Rusi said.