What is Feedzai, and how is it used to detect financial fraud?


Financial scams are rising, with losses amounting to $8.8 billion in 2022 alone. According to the United States Federal Trade Commission, losses from financial fraud have increased by 30% from 2021 to 2023. This paints a dire portrait of the darkish underbelly of digital development, with scammers now leveraging generative artificial intelligence (AI) to craft more and more advanced and life like scams.

Multiple experiences suggest scammers can create chatbots that mimic human dialog, ask for private financial particulars, create malware, write subtle phishing emails and even mimic human voices. The immediacy of immediate funds by way of digital banking additionally presents a chance for fraudsters to deceive customers into transferring cash immediately, leaving defrauded customers with little to no hope of getting their a reimbursement.

Risk administration platforms like Feedzai are a part of the continued battle towards financial crime. Powered by machine learning and massive knowledge, platforms like these boast superior know-how and high-level safety to fight subtle financial scams.

What is Feedzai, and how does it work?

Feedzai is a threat operations (RiskOps) platform that leverages machine studying know-how and AI to present retailers, banks and cost suppliers with fraud prevention options. The platform has a world attain and goals to shield folks from the dangers related to e-commerce and banking.

Initially based in Portugal in 2011, Feedzai is now based mostly in California and provides companies in 190 nations. Considered a market chief in its discipline, the corporate was initially developed by its founders, Nuno Sebastião, Paulo Marques and Pedro Bizarro, to supply operational intelligence and fraud detection options.

Today, Feedzai has developed into a collection of AI-based options particularly focused at detecting fraud and stopping financial crime. Feedzai’s major shoppers are established banks and financial establishments like Citibank, Standard Chartered and Lloyds Banking Group.

Feedzai, a RiskOps platform that makes use of machine studying

Feedzai is based mostly on the idea of RiskOps, a follow that operationalizes threat by way of honest and customer-centric approaches. RiskOps additionally empowers financial establishments to detect suspicious behaviors, determine scammers and fight fraud.

RiskOps helps financial establishments handle identification, knowledge and foster collaboration throughout varied methods extra effectively — permitting establishments to present their clients with superior and dependable companies.

Technically, what RiskOps platforms like Feedzai do is present financial establishments with a framework for more practical financial threat administration. Standardizing the danger administration and fraud prevention strategy makes it simpler to assess summary and difficult-to-define ideas like threat. As such, these establishments can confidently measure and analyze threat and make smarter choices based mostly on these findings.

Feedzai’s platform makes use of machine studying to course of occasions and transactions shortly whereas offering simply comprehensible outcomes by way of an added human-readable semantic layer. Its studying mannequin processes and transforms a number of knowledge streams and insights from varied sources to create extremely detailed buyer profiles, making figuring out fraudulent actions and potential victims simpler.

Feedzai minimizes the danger of fraud and cash laundering for financial establishments by gathering knowledge from varied sources, reminiscent of cross-channel, cross-product and third-party knowledge.

This helps to distinguish between genuine and fraudulent transactions, and it gives a complete view of how every particular person interacts with the financial institution. These profiles additionally make it simpler to determine clients extra probably to fall sufferer to scams — even earlier than a rip-off targets them.

The platform detects fraud shortly and in actual time for various cost sorts, reminiscent of playing cards, immediate transfers, digital wallets, withdrawals and deposits. The answer additionally provides production-ready software programming interfaces (APIs) for varied funds to give real-time transaction suggestions, reminiscent of whether or not to approve or decline them.

What is Feedzai used for?

There are a number of threats and weaknesses that Feedzai helps handle:

Addressing the shortcomings of legacy options

Financial establishments typically use a number of outdated level options that use rules-based approaches to detect fraud however don’t particularly concentrate on scams. Traditional approaches have three major limitations. First, they’re restricted to siloed channels, making them weak to fraud schemes that unfold throughout varied banking merchandise or cost platforms.

Second, legacy options detect fraud by analyzing both behavioral exercise (like app and gadget utilization patterns, malware incidence, biometrics and community exercise) or financial exercise (transactional knowledge throughout banking platforms). However, their evaluation doesn’t contemplate each kinds of exercise collectively, decreasing the flexibility to shortly determine an ongoing rip-off.

Lastly, these fraud safety measures don’t adapt shortly sufficient to counter new techniques used by scammers. Machine studying fills this hole by assimilating new knowledge and offering real-time insights into buyer conduct. Feedzai’s platform is designed to shortly detect financial fraud, cash laundering and different illicit actions with AI-driven approaches tailor-made to totally different cost mechanisms’ nuances.

Combatting the creation of faux accounts to compound rewards

The rise of digital transactions, notably for small however frequent purchases, has elevated rewards for retailers and shoppers. However, this progress additionally presents a chance for fraudsters to benefit from the rewards system.

Fraudsters are benefiting from the shift towards cashless transactions and elevated gamification by creating faux accounts and transferring the funds in circles to accumulate rewards.

Feedzai makes a speciality of analyzing community transactions made by account holders to determine hidden fraudulent cost networks. This means they’ll detect fraudulent patterns that might not be instantly apparent.

Detecting SIM swaps

SIM swapping is a kind of fraud the place a perpetrator poses because the proprietor of a cellphone quantity and convinces a name heart or department worker to swap out the related SIM card. This is finished by offering the sufferer’s private knowledge to the service.

Fraudsters purchase knowledge by way of hacks and knowledge breaches, or they exploit data that customers have publicly shared on social media. They use this data to deceive carriers into allowing them to substitute the SIM card linked to a cellphone quantity with a SIM card they possess. By doing this, all incoming calls and textual content messages are re-directed to the fraudster.

Feedzai helps fight this by analyzing transactional knowledge, which may be used to detect a SIM swap. For occasion, when a number of transactions are tried from totally different gadgets in fast succession, Feedzai’s algorithms will flag it as suspicious conduct and alert the financial establishment of a possible rip-off.

What are the important thing options of Feedzai?

Feedzai has added new ScamProtect options to its RiskOps strategy, which goals to assist enhance the platform’s capability to detect and forestall scams earlier than they hurt clients. Among the platform’s key options for fraud prevention are:

Comprehensive RiskOps structure

Feedzai operates in actual time and provides a singular centralized location for knowledge ingestion and interpretation. Its complete structure gives establishments with a centralized hub to detect rising fraud threats, determine new enterprise necessities, and analytics on consumer expertise and operational efficiency. By utilizing Feedzai, banks can anticipate the place their focus ought to be forward of traits.

Early intervention and schooling

Feedzai’s early detection capabilities allow banks to determine digital indicators reminiscent of conduct biometrics and different non-transactional patterns that will point out a possible rip-off sufferer. This can assist the banks intervene and educate clients earlier within the threat lifecycle earlier than they make a cost.

To navigate the complexity of rip-off fraud, alerts can report detailed explanations and particular indicators. This data can then information brokers to have more practical conversations with clients.

Human-centered AI

Technology generally leads to added roadblocks for purchasers as they’re considered as knowledge factors. This can lead to unfair classification into teams and pointless difficulties for financial institution clients (canceled transactions, incessant calls to confirm purchases they make, and so forth.).

Feedzai makes use of multidimensional knowledge that prioritizes clients by way of AI to handle this challenge. By creating hyper-accurate threat profiles based mostly on particular person behaviors, banks can determine adjustments and forestall financial crime with higher ease — whereas conserving clients happy.

Inbound cost monitoring

To efficiently rip-off somebody, a scammer wants to ship the cash to an account they management. However, with Feedzai, banks can now monitor each incoming and outgoing funds, giving them extra probabilities to forestall a rip-off from going down.

Triage conduct alerts

The platform’s fixed surveillance of every buyer builds intelligence to determine fraudulent conduct shortly. Feedzai Case Manager then permits key individuals to immediately take motion on alerts, automate processes and arrange crew workloads.

The platform can direct particular alerts to agent teams based mostly on their coaching by way of position and queue administration. Additionally, the platform contains dashboards and reporting that categorize fraud sorts, permitting for simpler monitoring of detection and alert administration.


Feedzai can customise and categorize guidelines to incorporate specific clauses associated to scams, which may be modified in response to adjustments in fraudulent schemes. Additionally, the platform can undertake a regional strategy by utilizing parameters reminiscent of financial institution codes, states or product sorts, permitting establishments to develop tailor-made methods when essential.

The way forward for AI-powered threat operations

Risk operations enabled by AI are anticipated to expertise transformational progress sooner or later. Risk assessment, detection and mitigation throughout sectors will likely be revolutionized by cutting-edge machine studying algorithms and predictive analytics.

Rapid evaluation of enormous knowledge units by AI will reveal advanced patterns and anomalies, enabling proactive threat administration. Response agility will likely be improved, decreasing vulnerabilities, utilizing real-time monitoring and adaptive algorithms. Sentiment evaluation and natural language processing will enhance data of threat, together with social and reputational components.

Furthermore, collaborative AI-human workflows will optimize decision-making, and AI’s self-learning abilities will allow it to constantly adapt to evolving dangers. Ultimately, AI-powered threat operations will usher in an period of precision, effectivity and resilience, mitigating threats and fostering safer, safer environments.