Groundbreaking experiments led by Swift have demonstrated the potential impact AI and secure cross-border data collaboration could have on reducing fraud levels in international payments. Working with 13 global financial institutions, the experiments used privacy-enhancing technologies (PETs) to enable institutions to securely share fraud insights across borders. In one use case, the PETs enabled participants to verify intelligence on suspicious accounts in real-time, a development which could speed up the time taken to identify complex international financial crime networks and avoid fraudulent transactions being executed.
In a separate use case, participants used a combination of PETs and federated learning – an AI model that ‘visits’ each institution to train on its data locally, so that institutions can collaborate without sharing customer information – to identify anomalous transactions. Trained on synthetic data from ten million artificial transactions between participants, the model was twice as effective in identifying instances of known frauds as a model trained on a single institution’s dataset. Rachel Levi, Head of AI at Swift, said: “These experiments demonstrate the convening power of Swift as a trusted cooperative at the heart of global finance. A united, industry-wide fraud defence will always be stronger than one put up by a single institution acting alone. The industry loses billions to fraud each year, but by enabling the secure sharing of intelligence across borders we’re paving the way for this figure to be significantly reduced, and allowing fraud to be stopped in a matter of minutes, not hours or days.” Following these successful experiments, Swift intends to expand participation before launching a second phase of tests, which will use real transaction data and seek to demonstrate the technologies’ impact on real-world fraud.
Swift has a long track record of collaborating with the industry, using the latest technology to solve common challenges and enhance the speed, efficiency and security of cross-border transactions. The cooperative has been actively exploring the role AI can play, and currently has more than 50 use cases across proof of concept, pilots and live usage. Financial crime is estimated to have cost the industry USD 485bn in 2023 alone, and earlier this year Swift launched an AI-enhanced Payments Controls Service, which helps small and medium-sized financial institutions more accurately flag suspicious transactions so that action can be taken in real time. Participants included ANZ, BNY and Intesa Sanpaolo, as well as technology partners including Google Cloud. David Buckthought, Head of Technology – Payment Services and Digital Assets at ANZ, said: “The rise in fraud and scams is a global issue impacting all financial institutions. ANZ is excited to be involved in an industry-wide response, proving the use of federated learning to enhance detection capabilities. This will provide banks with a stronger defence against fraudulent activity.” Isabel Schmidt, Executive Platform Owner at BNY, said: “Security is paramount in cross-border payments. Using the latest technologies, this group has achieved results that show how these tools can be used to uplift the entire ecosystem and demonstrate the value of the Swift co-operative in bringing competitive organizations together behind a greater good, while driving standards in security and enhancing the experience of all stakeholders.” Enrico Canna, Head of Anti-Fraud & Customer Protection Centre at Intesa Sanpaolo, said: “Fraud in cross-border payments increases friction in the ecosystem and causes significant costs at an industry level. Intesa Sanpaolo is collaborating in these preliminary experiments led by Swift to demonstrate the positive impact of a synergistic approach supported by the latest technologies for making the ecosystem more secure and reliable.”
These trials establish a blueprint for banks to leverage AI and collaborative data sharing to combat fraud more effectively, potentially saving billions in losses and enhancing global financial security.
Swift is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance. Our messaging platform, products and services connect more than 11,500 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. While Swift does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world.
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