AI-powered decision management is key for the security of global payment ecosystems
With hundreds of thousands of decisions to make every second of every day, Mastercard depends on its award winning Brighterion AI-powered Decision Management Platform to detect fraud and other irregularities.
While many fintech platforms focus on risk assessment, Brighterion AI has been dedicated to AI-powered decisioning for more than 20 years. With a sharp focus on detecting financial irregularities, Brighterion AI’s decision-making algorithms provide real-time detection in a range of use cases, including transaction fraud, healthcare fraud, waste and abuse, and money laundering (AML).
The role of AI is taking top billing in the search for software that detects fraud and credit risk. Machine learning rises to the top for its ability to learn from complex and widely varied data. This may include the usual behavior associated with each account, typical behavior for certain transaction types and locations of users. When anomalies are detected, they are flagged and scored for investigation. Machine learning adds those “good” and “bad” behaviors to the algorithms for future reference as each decision is updated.
Mastercard trains AI models on its unique transaction intelligence derived from decades as a global payments leader. Decades of working with merchants brings a rich history and expertise to the process of protecting issuers and acquirers while processing over 100b transactions a year. The insights gained from these unique datasets provide the worldwide knowledge of good and bad transaction attributes to accurately assess risk. Some organizations have unique challenges and opt to have custom AI models, trained on their own historical data.
Speed is also paramount. AI-powered decisioning solutions instantly analyze thousands of data points to provide real-time results. The great benefit for organizations is that they can see instant, accurate results, knowing that a trained model substantially reduces false positives.
Our customer Worldpay, the largest acquirer in the world, processes transaction payments for merchants worldwide. After less than two months of training the AI model on their historical data, Worldpay launched with 20 times fewer false positives than with their previous detection solution while increasing the fraud detection rate by over three times. Today, over a decade later, Brighterion AI has helped Worldpay reduce fraud by more than $50 million year over year, every year, since 2019 in the U.S. alone.
The Mastercard-Brighterion AI success story
With so many platforms focused only on risk assessment, Mastercard recognized the need for a more comprehensive solution for rising financial fraud. Mastercard wanted to speed up decision-making and detect fraud in an environment that would learn from findings to reduce future financial crime. This was the genesis of Brighterion AI being incorporated into the Decision Management Platform (DMP). Mastercard blocked $55 billion in confirmed fraud in the first three years from the DMP launch in 2017.
The DMP team uses this innovative technology to ensure business needs are met in real time without disruption. The platform enables business agility in product launches by automating high-volume transaction decisions and delivering products and solutions at scale.
In 2022, CIO magazine named Mastercard a CIO 100 Award winner for its innovative solution that provides protection for its own companies and is used by thousands of leading issuing banks, acquirers, merchants and solutions customers, including organizations outside of the Mastercard ecosystem.
“We are thankful to our Brighterion AI team for their strong partnership and industry-leading AI that provides a key strategic differentiator for the DMP products such as Decision Intelligence,” says John Chisholm, Senior Vice President of Mastercard’s Decision Management Program.
Tangible benefits of the Decision Management Platform
The DMP powers more than 20 different products and incorporates thousands of business rules that are calculated in tens of milliseconds. Every transaction is run through multiple AI models in parallel. A sample of the products developed are:
- Safety Net – Prevents catastrophic fraud against our customers.
- Fraud Rules Manager – Enables customers to implement over 450 rule changes per week to keep up with rapidly changing fraud activity.
- Stand-In – Provides on-behalf decisioning for customer banks in the event of system outages.
- Consumer Controls – Allows cardholders to set controls. For example, they can set limits on how the account is used such as a budget control limit on monthly spending for entertainment.
- Decision Intelligence – Provides industry-leading fraud detection. Our customers report an average 30 percent improvement in fraud detection while reducing false positives by more than 60 percent.
AI-powered decision management preserves customer loyalty
An important consideration in fraud prevention is the impact of false declines and false positives on merchant and consumer relationships. Both online and in-store, customers are looking for frictionless interactions that approve authentic transactions. False declines often mean lost e-commerce sales. More significantly, these losses may cause further revenue loss in the coming days.
Ensuring merchants (or your own sales department) are happy and profitable provides stability for your business. Losing a major merchant significantly affects acquirers. Consider these top customer loyalty stats through the lens of how your transaction decisions affect merchants’ revenue and marketplace reputations.
- Retaining customers is 5-25 times less expensive than the acquisition of new ones. (Customer Gauge)
- 75% of consumers expect a consistent experience wherever they engage with a brand regardless of the channel (website, social media, mobile, in person). (Salesforce)
- Increasing customer retention by 2 percent lowers costs by as much as 10 percent. (More Than Accountants)
- Profit can increase between 25 to 95 percent just by increasing customer retention by 5 percent. (More Than Accountants)
Innovation is needed in changing times
At Mastercard, we continue to innovate and continuously improve our AI and decisioning products. Strategic use of AI not only improves organization’s operational and fintech challenges; it positions them to easily scale to address new technological challenges, such as the worldwide shift to massive e-commerce in 2021 and beyond.
Learn more about the Brighterion AI platform to learn how we can help address your organization’s challenges.
