Cognizant and FICO to Launch Real-Time Payments Fraud Prevention Solution

Cognizant and FICO plan to launch a cloud-based real-time payments fraud prevention solution designed for North American banks and other payment service providers.

The joint offering would leverage both firms’ artificial intelligence (AI) and machine learning (ML) technologies, the companies said in a Wednesday (April 17) press release.

“In today’s fast-paced financial landscape, staying ahead of fraudsters is crucial,” Alexandre Graff, global head of partners and alliances at FICO, said in the release. “Our collaboration with Cognizant aims to provide stronger protection for real-time payments by combining the Cognizant communication layer and clearing gateway with FICO Falcon Fraud Manager, the leading payments fraud management solution.”

The companies aim to ensure security for real-time payments for FedNow® Service, RTP®, SEPA Instant Credit Transfer and other payment clearings, Graff said.

Their planned joint offering would help banks and other payment service providers protect their customers from fraud at a time when instant payments are gaining popularity, according to the release.

It would provide real-time fraud prevention, seamlessly integrate with real-time payment rails, and enable the detection and blocking of fraudulent transactions, the release said.

The planned solution would be implemented on the customer’s choice of pay-per-use or licensing basis to eliminate upfront costs, per the release.

“Our collaboration with FICO intends to provide an AI- and ML-based layer of protection against sophisticated threats by detecting and blocking fraud with granular precision, reducing losses and improving customer experience,” Nageswar Cherukupalli, senior vice president and business unit head of Banking & Capital Markets and Strategic Initiatives at Cognizant, said in the release.

PYMNTS Intelligence has found that consumers value faster payment solutions, but financial institutions are reluctant to provide these solutions due in part to rising fears of fraud.

Financial institutions have experienced increased fraud rates across most payment methods, with half of them citing increased fraud related to real-time payments, according to “How Fraud Fears Impact FIs’ Adoption of Faster Payment Solutions,” a PYMNTS Intelligence and Hawk AI collaboration.

The report also found that 80% of financial institutions said that using AI and ML technology increases their confidence in providing secure real-time payments.