Jack Henry launches an AI-based fraud detection system

This cloud-native feature supports person-to-person (P2P) payments, consumer and business bill payments, and account-to-account (A2A) outbound external transfers powered by the Payrailz Digital Payments Platform. As each payment transaction is scheduled, the system uses AI and machine learning to detect and weigh multiple fraud attributes and indicators, including known and previously unknown fraud instances and patterns. It then generates an aggregated, actionable score for each transaction. 

Depending on their individual risk tolerances, financial institutions can configure score ranges and other thresholds. The AI-enabled fraud engine will continue to learn to detect evolving and emerging fraud patterns. What makes Fraud Monitor stand out is that it has the ability to minimise payment fraud in a substantial way, even during account takeover (ATO) attempts. During these types of attacks, fraudsters take possession of an authentic user’s credentials and attempt to quickly move funds out of their accounts. 

The launch of the Payrailz Fraud Monitor feature is in line with Jack Henry’s strategic commitment to offer new solutions capable of aiding banks and credit unions to reduce fraud and fraud attempts. The company’s technology modernisation strategy also includes the launch of the Jack Henry Financial Crimes Defender, which is a cloud-native, cross-channel fraud detection platform that will become available in summer 2023. 

In the company press release, officials from Jack Henry touched on the subject of payment fraud mitigation and emphasised the necessity of a multi-layered approach that targets fraud attempts at the different stages of a payment transaction.

Other important developments from Jack Henry

Jack Henry is a financial technology company that supports connections between financial institutions and the people and businesses they serve. In May 2023, the company announced that it will contribute to the launch of the Federal Reserve’s payment network, the FedNowSM Service. 

The company participated actively in the development process of the new network, which is currently expected to launch in July of 2023. According to the press release, multiple Jack Henry clients and customers will participate in supporting the pilot launch, as well as being an early adopter programme. In addition, Jack Henry developed its JHA PayCenter, which is a proprietary payments hub designed to connect financial institutions to the Zelle Network, the RTP Network, and the FedNow Service.