Mastercard, a leader in global payments, has launched “TRACE”, (Trace Financial Crime), an advanced Artificial Intelligence (AI) solution designed to combat financial crime in the Asia Pacific region.
By leveraging vast transaction data from multiple financial institutions, TRACE provides a holistic, network-wide approach to identifying and preventing illicit fund movements, surpassing the limitations of individual banks internal monitoring systems.
The rapid adoption of Real-Time Payments (RTP) has revolutionized digital transactions, enabling near-instant fund transfers across financial institutions. However, this speed has also created opportunities for fraudsters and money launderers who exploit the system by quickly moving funds across multiple accounts. Many criminals use unsuspecting individuals’ bank accounts, often acquired through scams to launder money, making detection more challenging.
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Traditionally, financial institutions have relied on isolated fraud detection methods, which often involve manual reviews that lack the ability to track patterns across an entire payment network. TRACE addresses this gap by providing a real-time, Al-powered view of suspicious transactions, proactively flagging fraudulent activity and identifying money mule accounts before they can be used for illicit purposes.
The first rollout of TRACE in Asia Pacific is in the Philippines, in collaboration with BancNet, the operator of the country’s real-time payment system, InstaPay. With 36 domestic banks already onboarded, TRACE is enhancing fraud prevention efforts by helping financial institutions trace illicit fund flows and comply with the Philippines’ new Anti-Financial Account Scamming Act (AFASA).
Speaking on the roll-out of TRACE, executive Vice President services Asia Pacific Matthew Driver said,
“The launch of TRACE in Asia Pacific marks a transformative step toward safeguarding the integrity of Real-Time Payments while combatting the corrosive effects af financial crime. By ensuring that transactions remain secure and compliant, TRACE helps to protect consumers and financial institutions, while also fostering trust in the digital economy-which will be critical for the region’s economic growth. Mastercard is proud to have collaborated with BancNet on its pilot rollout in the Philippines and is ready to collaborate with other stakeholders across the region to implement TRACE to create a stronger, more resilient global financial system.”
Also commenting, Emmie Reyes, Chief Executive Officer, BancNet, said,
“As scams grow more sophisticated, advanced tech-powered prevention and monitoring capabilities are critical. Our partnership with Mastercard and leveraging TRACE gives us and the network participants the intelligence to help detect fraud faster, making scam prevention sharper and more effective”.
TRACE is designed to be network-agnostic, meaning it can be seamlessly integrated into various payment infrastructures across different countries. Its success in the United Kingdom, where it has been in use since 2018, demonstrates its effectiveness. Today, TRACE supports 21 financial institutions in the UK, covering 90% of the Faster Payments Service network, and continues to identify and disrupt fraudulent activity on a large scale.
As digital transactions continue to surge worldwide, so does the sophistication of financial crime. Fraudsters are leveraging advanced tactics to exploit real-time payment systems, making traditional fraud detection methods increasingly inadequate. To combat this growing threat, financial institutions are turning to artificial intelligence-powered solutions to detect and disrupt money laundering and financial scams in real time.
With financial fraud becoming more sophisticated, the adoption of Al-driven tools like TRACE is set to accelerate. Industry experts predict that Al will play a critical role in shaping the future of fraud prevention.
TRACE, developed by Mastercard, exemplifies the next generation of Al-driven fraud prevention tools. With its expansion into Asia Pacific, the AI driven fraud prevention tool is set to play a crucial role in protecting consumers, financial institutions, and regulatory bodies from the evolving threats of financial crime, ensuring the continued growth and security of real-time payment ecosystems.