Swift to introduce AI-enabled fraud defence

Considering the current financial landscape, where bad actors advanced their tactics for performing fraudulent activities, Swift intends to roll out a new AI-powered fraud detection solution to help banks in proactively identifying and defending against financial crime. Planned to be introduced starting with January 2025, the solution comes after collaboration with banks globally and a pilot phase conducted earlier in 2024.

The current announcement follows central and commercial banks’ news in which they revealed their plans to leverage the Swift network for trial transactions related to digital currencies and assets. At that time, financial institutions across North America, Europe, and Asia were set to use Swift connectivity to conduct live trials that were a result of collaborative efforts with other organisations.

Identifying and flagging suspicious activities

The upcoming feature builds on Swift’s existing Payment Controls service by extracting pseudonymised data from transactions that flow over the company’s network each year to identify and flag any suspicious payments. This allows action to be taken in real time. In addition, the launch comes as part of Swift’s broader collaboration with its global community of banks and financial institutions to test how AI can mitigate cross-industry complexities, with the company focusing its efforts on leveraging the technology to provide organisations with more accurate insights into instances of potentially fraudulent activity.

Furthermore, since February 2024, Swift has been engaging with global financial institutions to explore how federated learning, merged with privacy-advancing technologies, could allow market participants to share information without disclosing their proprietary data. Until now, the group developed several fraud detection use cases which are set to be tested in a sandbox environment. In addition, the launch of the new service supports Swift’s commitment and strategy of making end-to-end international transactions instant and user-friendly, while maintaining security and compliance with regulatory requirements.