Philippines debuts Mastercard’s AI-based financial crime prevention system

Details: Vaughan O'Grady; Category: Cybersecurity; 14 February 2025; 10867 views

Payment giant Mastercard has officially announced the launch of TRACE (Trace Financial Crime) in the Asia Pacific region. Described as a sophisticated network-level solution that harnesses artificial intelligence to identify and prevent money laundering and financial crime, it has begun its rollout in the Philippines.

Powered by timely and large-scale payments data from multiple financial institutions, TRACE provides holistic intelligence beyond an individual financial institution’s siloed view, enabling tracing of financial crime across a payments network.

In recent years, Mastercard explains, real-time payments (RTP) have seen a rapid rise in use among individuals and businesses across Asia Pacific, allowing transactions to be settled between accounts at different financial institutions within seconds. However, this speed has also made RTP a target for money launderers and ‘mules’, who try to evade detection by moving funds rapidly between multiple accounts.

Financial institutions have largely relied on semi-manual methods or in-house AI solutions to detect these illicit patterns, but these typically rely on their own data and lack the holistic, network-level perspective needed to trace such far-reaching criminal activity. Investigations may take weeks to complete.

To address this, Mastercard developed TRACE, which uses cutting-edge data science techniques to trace potentially fraudulent transaction patterns across a payments network, as well as providing proactive alerts to banks about suspicious accounts.

TRACE incorporates critical data points across an entire domestic network to identify money mules involved in financial crime (such as frauds or scams), giving financial institutions a network-level perspective they would not otherwise have.

Mastercard’s first Asia Pacific rollout of TRACE was in the Philippines in collaboration with local interbank network BancNet (the switch operator of local RTP service InstaPay). BancNet has already onboarded 36 domestic banks.

The solution allows participating financial institutions to quickly and extensively trace dispersed illicit funds across the RTP system, identify money mule activity throughout the network, and proactively highlight suspected money laundering accounts – all of which will allow them to better adhere to the country’s new Anti-Financial Account Scamming Act (AFASA).

TRACE, says Mastercard, is the first network-level solution for RTP systems developed to proactively identify money mules and trace the dispersion of funds. TRACE is network-agnostic and can be quickly and effectively implemented within the payment networks across the region, helping to protect customers from fraud and scams as well as supporting regulatory obligations.

The UK is the only other market in the world so far to have implemented TRACE.