Banking co-operative Swift is working with global banks on AI pilots to tackle cross-border payments fraud.

In the first pilot, Swift is enhancing its existing Payment Controls service – which helps financial institutions detect anomalies that could be indicative of fraud – by using an AI model that will create a more nuanced and accurate picture of potential fraud derived from historical patterns of activity on the global messaging network. The tests will use live traffic data from member banks to test the real world applicability of the model.

In a separate experiment, Swift has convened 10 leading financial institutions to test how it can use advanced AI technology to analyse anonymously-shared data to sniff out potential fraud.

The group, which includes BNY Mellon, Deutsche Bank, DNB, HSBC, Intesa Sanpaolo and Standard Bank, will test the use of secure data collaboration and federated learning technologies to gather insights and identify potential fraud patterns from a much richer dataset.

Tom Zschach, chief innovation officer at Swift, says: “AI has great potential to significantly reduce fraud in the financial industry. That’s an incredibly exciting prospect, but one that will require strong collaboration. Swift has a unique ability to bring financial organisations together to harness the benefits of AI in the interests of the industry, and we’re excited by the potential of both of these pilots to help further strengthen the cross-border payments ecosystem.”