Visa Uses Generative AI to Catch Suspicious Financial Transactions

Visa is using generative AI to detect financial fraud in customer transactions.

Bad actors can exploit bank accounts through digital tools that enable them to make test purchases. These seem innocuous initially, designed to look like genuine transactions to avoid suspicion before the fraudster then steals sizable sums from the unsuspecting victim’s account.

Known as enumeration attacks, fraudsters steal $1.1 billion annually using this technique, according to Visa.

To combat enumeration attacks, Visa’s new Account Attack Intelligence (VAAI) Score tool uses generative AI to identify suspect transactions in real time.

“Enumeration can have lasting impacts on our clients and there’s an immediate need for tools that can better detect and prevent these attacks in real-time,” said Paul Fabara, Visa’s chief risk and client services officer. “With the VAAI Score, our clients now have access to real-time risk scoring that can help detect the likelihood of an enumeration attack so issuers can make more informed decisions on when to block a transaction.

In 2023, Visa said it blocked $40 billion in fraudulent payments, but the company wants to do more.

Its new AI tool learns a cardholder’s transaction patterns, identifying their normal and abnormal spending habits. The tool automatically assigns a risk score to a payment in around four milliseconds based on its likelihood to be fraudulent, flagging transactions likely to be an attack.

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The tool was trained on more than 15 billion transactions. It generates a score by comparing transactions against historical enumeration patterns, enabling the model to predict the likelihood that a purchase is, in fact, an enumeration attack.

The tool reduced false positive fraud detection rates by 85% compared to other risk models, according to Visa.

The generative AI-powered VAAI tool will initially be made available to U.S.-based financial firms.

“With access to advanced technology, fraudsters are monetizing stolen credentials faster than ever before,” said Michael Jabbara, Visa’s global head of fraud services. “Enumerated transactions impact the entire ecosystem and with the VAAI Score, we’re giving our clients a sophisticated tool that can help prevent cardholder accounts from being compromised and stop fraudulent transactions before they happen.”