Cyber criminals are keeping corporations and public institutions around the world on their toes. A 2018 survey from the Association for Financial Professionals found that a record 78% of organizations dealt with payment fraud last year.
Business Insider reports how Citigroup is partnering with AI-powered fintech startup Feedzai, a Citi Ventures investment, to detect potential fraud more accurately among the $4 trillion worth of transactions that the firm processes daily through its lucrative Treasury and Trade Solutions business. The companies earlier worked together to bolster a Citi fraud alert tool called Citi Payment Outlier Detection.
An earlier iteration of this tool was piloted to flag suspicious bank activity, which could be attributed to a range of causes from an innocuous error to a cyberattack.
"The underlying reasons could be many, but what the tool does is it uses our own channels to identify the payment and go back to our customers and say, 'Is this really you? Is this the payment you intended to do?"
"The underlying reasons could be many, but what the tool does is it uses our own channels to identify the payment and go back to our customers and say, 'Is this really you? Is this the payment you intended to do?" Manish Kohli, global head of payments and receivables in Citi's Treasury and Trade Solutions division, told Business Insider.
While Kohli describes the tool as popular, broad rules to spot outliers can be too sensitive when applied to a wide range or client behavior. False positives ensued, which can numb customers to alerts and lead to a “crying wolf” situation in the increasingly digital world of payments.
Feedzai’s capabilities in machine learning and AI made it an ideal fit to address Citi’s payment-outlier-alert woes. Their solution adapts to individual customer behavior and identifies payment patterns, thereby increasing accuracy and reducing false positives.
"We recognize with institutional clients, every client is different. And their payment pattern is different," Kohli told Business Insider.
With this partnership now underway, Kohli anticipates expanding the customer base for this now AI-enhanced Citi Payment Outlier Detection system, beginning in early 2019, and applying Feedzai’s technology to other aspects of Citi’s business.