Swift AI Advancements Pave Way for Quicker Fraud Prevention in Banks via Cross-Border Cooperation
In a groundbreaking development, Swift, a global cooperative at the heart of the cross-border payments industry, has been leading experiments to demonstrate the power of Artificial Intelligence (AI) and secure cross-border data collaboration in reducing fraud levels in international payments.
Each year, the industry loses billions to fraud. However, Swift aims to significantly reduce this figure by enabling the secure sharing of intelligence across borders. This collaborative approach could potentially speed up the identification of complex international financial crime networks.
Enrico Canna, Head of Anti-Fraud & Customer Protection Centre at Intesa Sanpaolo, is among those collaborating in these experiments. The experiments, which involve 13 global financial institutions, have used privacy-enhancing technologies (PETs) to enable secure sharing of fraud insights across borders.
One use case saw PETs enabling participants to verify intelligence on suspicious accounts in real-time. Another combined PETs with federated learning, an AI model that trains on local data without sharing customer information, to identify anomalous transactions.
The federated learning model, trained on synthetic data from ten million artificial transactions, was twice as effective in identifying instances of known frauds as a model trained on a single institution's dataset.
Swift collaborates with over 50 financial institutions and technology partners, including ANZ, BNY, Intesa Sanpaolo, and Google Cloud. David Buckthought, Head of Technology - Payment Services and Digital Assets at ANZ, is excited about the use of federated learning to enhance detection capabilities against fraudulent activity.
Isabel Schmidt, Executive Platform Owner at BNY, emphasizes the importance of security in cross-border payments and the value of Swift in bringing competitive organisations together for a greater good. Rachel Levi, Head of AI at Swift, stated that these experiments demonstrate Swift's role as a trusted cooperative at the heart of global finance.
Levi also mentioned that a united, industry-wide fraud defense would be stronger than one put up by a single institution acting alone. Financial crime cost the industry USD 485bn in 2023 alone, and Swift plans to expand participation and launch a second phase of tests using real transaction data to demonstrate the technologies' impact on real-world fraud.
Moreover, the AI-enhanced Payments Controls Service launched by Swift helps small and medium-sized financial institutions more accurately flag suspicious transactions for real-time action.
These experiments mark a significant step forward in the fight against fraud in the cross-border payments industry. With the potential to reduce billions in losses each year and strengthen the industry's collective defense against financial crime, Swift's work could have far-reaching implications for the future of global finance.
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