Which Company's Case Study?
This is a case study of Mastercard, a global payment technology company. To address the long-standing challenge of credit card fraud, Mastercard built 'Decision Intelligence,' an AI-powered system that assesses transaction risk in real time, and offers it to financial institutions that issue cards.
Challenges They Wanted to Solve
With the expansion of e-commerce, credit card fraud has become more sophisticated, and methods have diversified. Traditional rule-based fraud detection systems faced challenges such as slow response to new fraud techniques and 'false positives' (incorrectly blocking legitimate transactions) that damaged the customer experience.
How AI Was Used
Mastercard Decision Intelligence scores transaction fraud risk at authorization time to support issuer decisions. Decision Intelligence Pro uses graph techniques and generative AI to assess relationships among accounts, purchases, merchants and devices, adding context beyond a single transaction. Approval and decline operations remain part of the issuer's authorization flow.
Introduction Effects and Key Takeaways
- ▸Mastercard says Decision Intelligence Pro analyzes one trillion data points and improved fraud-detection rates by 20% on average, with improvements as high as 300% in some instances.
- ▸The company also reports reducing false positives by more than 85%. These are Mastercard's aggregate claims and do not guarantee identical results for every deployment.
- ▸The system combines graph techniques and generative AI at authorization time to assess fraud while reducing friction for legitimate transactions.
What Japanese Companies Can Learn
In industries that handle vast amounts of transaction data, such as finance, retail, and telecommunications, similar approaches can be used for real-time risk assessment and fraud detection. Rather than developing everything in-house, utilizing AI services offered by companies like Mastercard via APIs can be an effective option for rapid implementation. The sense of balance in strengthening security without compromising the customer experience will provide important insights for many companies.