Banking on tech: Lenders keep an eagle 'AI' on mule accounts

economictimes.indiatimes.com:

mule accounts, deploying AI tools to track suspicious patterns like dormant accounts receiving large credits or multiple accounts showing identical recurring transactions simultaneously.

Financial technology companies such as Bureau, Clari5 and Datasutram are helping banks deploy AI-based fraud detection systems that can detect issues like mule accounts — bank accounts criminals use to launder money, often without the account holder's knowledge — in real time, rather than waiting for defrauded customers to raise a complaint.

Lenders are using AI tools to constantly analyse their savings and current accounts. Whenever there is an anomaly spotted by these software systems, red flags are raised for subsequent investigation, industry insiders told ET.

Banks are trying to get ahead of fraudsters with this change in fraud detection strategy from being reactive to proactive, even as fraud detection has become a regulatory and government mandate amid increasing frauds. Some large banks have been reporting fraudulent transactions worth Rs 400-500 crore in a month, industry insiders said.

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