21 July 2018
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NatWest and Vocalink use machine-learning to tackle invoice redirection fraud

03 April 2018  |  13182 views  |  0 Group of arrows with one odd pointing other direction

NatWest claims to have saved its corporate clients over £7 million through the use of a purpose-built system to detect and prevent invoice redirection fraud - where businesses are duped into paying money into a fraudster’s account rather than to their intended supplier.

Vocalink Analytics and NatWest worked together to develop, test and launch Corporate Fraud Insights, which uses AI and machine-learning techniques to identify and flag suspicious non-real time payments.

Gary Kearns, EVP for Vocalink Analytics says: “We apply sophisticated analytical techniques to vast amounts of payments data to build models which identify suspicious activity. Every time a business pays an invoice, a behavioural signature is left behind. By analysing these signatures, and the signatures of historical frauds, we are able to identify and flag suspected incidents of fraud."

Invoice redirection fraud is a growing problem in the B2B marketplace and can have devastating consequences for small business that fall victim to the scam. Recent research commissioned by Vocalink among 510 SMEs found that a quarter of firms have been on the receiving end of attempts to redirect cash transfers. Of those to have fallen prey to the fraudsters, 26% stated that they suffered losses of thousands of pounds while nine percent lost millions of pounds.

Lee Fitzgerald, head of fraud for Commercial and Private Banking at NatWest, says: “Detecting invoice redirection fraud is akin to finding a needle in a haystack, as there are tens of millions of legitimate non-real time payments every day.

“While the volume of fraud is relatively low, the values are typically large amounts, so the business impact of this type of fraud can be crippling."

The NatWest Business Banking Security Centre has more advice on how to combat various types of fraud that target businesses.

Want to learn more about how AI is transforming traditional financial services? Register for Finextra's NextGen Banking London: the AI Revolution conference and hear how some of Europe's top banks are using the technology to radically improve efficiency, risk management and regulatory compliance, and customer service.

 

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