In what could be the most significant advancement in artificial intelligence-driven cybersecurity yet, Mastercard has announced the acquisition of global threat intelligence company Recorded Future for $2.65 billion. Like several of Mastercard’s recent efforts, Recorded Future leverages AI to analyze billions of data points to identify potential threats.
A privately held firm, Recorded Future bills itself as the world’s largest threat intelligence company, with more than 1,900 clients across 75 countries. Recorded Future provides real-time visibility into potential threats by analyzing a broad set of data sources, enabling its customers to take action to mitigate fraud risks.
“Properly leveraged AI can be invaluable to all aspects of fraud mitigation,” said Kevin Libby, Analyst in Fraud and Security at Javelin Strategy & Research. “It is especially useful in identity verification and authentication and fraud detection.”
Moving Strongly Into AI
The acquisition builds on several recent Mastercard initiatives designed to use the latest technology to protect both cardholders and merchants from fraud. In May, the company announced its use of AI to detect compromised credit cards faster and intercept card data before it falls into the hands of cybercriminals.
This tool employs generative AI to cross-reference compromised credit card data with geographical clues, enabling the identification and replacement of breached cards. It also analyzes fraudulent card data to detect compromised merchants or payment platforms. The AI-driven approach operates more effectively than human-based methods like database inquiries.
Mastercard has also been exploring biometrics as a fraud-fighting tool. The company introduced its Scam Protect program earlier this year, which combines AI with behavioral biometrics to monitor physical interactions across devices and identify any unusual behaviors, such as hesitation while typing or interacting with the website or app.
In August, Mastercard announced a pilot program for its Payment Passkey Service in India, with plans for a global rollout. This offering uses tokenized transactions and biometrics, such as fingerprints or facial scans, to reduce fraud and enhance transaction approval rates at checkout.
“Fraud detection platforms that integrate AI tools have a greater degree of flexibility,” said Libby. “They quickly detect anomalous behavior and recognize emerging fraud patterns. They can respond to new threats and interrupt novel fraud schemes faster than rules-based systems.”
These tactics have become necessary to fight the rising threat of credit card fraud. The Federal Trade Commission reports that consumers lost more than $10 billion to various forms of financial fraud in 2023, the highest dollar amount ever reported. The FTC received more than 400,000 complaints from consumers whose information was misused with existing credit cards or during the application process for new ones.
