Swift and Global Banks launch AI pilots to tackle Cross-Border Payment Fraud

Swift and Global Banks Team Up to Combat Cross-Border Payment Fraud with AI

Swift, the global financial messaging service, is partnering with leading banks on two AI-powered pilots to reduce fraud and streamline cross-border payments significantly. AI could help the payments industry save billions in fraud-related costs and remove friction from the cross-border payments ecosystem.

Enhanced Fraud Detection:

• Swift is upgrading its "Payment Controls" service with an AI model. This model will analyze historical network activity to identify potential fraud patterns with greater accuracy and nuance.
• Real-world testing using live traffic data with participating banks ensures the effectiveness of the AI model.

Collaborative Data Sharing:

• A consortium of 10 major banks, including BNY Mellon, Deutsche Bank, and HSBC, is collaborating with Swift to explore using AI for secure data sharing and analysis.
• This initiative aims to strengthen the global financial ecosystem by leveraging federated learning, where data remains anonymous while insights are shared.

Potential Impact:

• AI-powered fraud detection could save the industry billions of dollars annually, significantly reducing financial losses. Fraud cost the financial industry USD 485 billion in 2023 alone, per Nasdaq and Verafin's 2024 Global Financial Crime Report.
• Secure data collaboration has the potential to revolutionize fraud prevention, like its success in cybersecurity, by enabling the sharing of valuable information without compromising data privacy.

These pilots represent a significant step towards faster, more secure, and ultimately more efficient cross-border payments, aligning with the G20's goals for the global financial system.

(Reference: Swift)