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Oscilar Launches AI-Powered ACH Fraud Detection for FinTechs, Financial Institutions

fraud detection

Oscilar has added an artificial intelligence (AI)-powered ACH Fraud Detection product to its lineup of risk technology solutions for FinTechs and financial institutions.

The new solution uses machine learning (ML) algorithms, generative AI, and real-time data analysis and explainability to identify and prevent fraudulent transactions, the company said in a Thursday (June 13) press release.

“Cracking down on ACH fraud is one of the biggest challenges for our FinTech and financial institution customers, and ACH fraud costs companies and consumers billions each year,” Neha Narkhede, co-founder and CEO of Oscilar, said in the release. “Our new ACH Fraud Detection product allows customers to prevent fraud in real-time while also helping them navigate the regulatory landscape with ease and confidence.”

The solution addresses several types of fraud, including first-party fraud, account takeover, stolen account details, scams, business email compromise (BEC), money mules and ACH check kiting, according to the release.

Its fraud detection capabilities analyze bank account usage patterns and validate intent, detect new attack vectors, and help risk operations teams scale their investigations and reviews, the release said.

“This comprehensive approach is well-suited for detecting and staying ahead of the ever-evolving nature of ACH fraud,” the press release said. “It enables financial institutions to effectively combat fraudulent activities and protect the entire customer journey before money moves out.”

PYMNTS Intelligence has found that both same-day ACH and regular ACH payments have experienced notable spikes in fraudulent activities.

Those increases come at a time when 43% of financial institutions reported an increase in fraud in 2023 compared to the previous year, according to “The State of Fraud and Financial Crime in the U.S. 2023,” a PYMNTS Intelligence and Hawk AI collaboration.

The report also found that 66% of financial institutions with assets of $5 billion or more are using ML and AI technologies to combat fraud, up from 34% in 2022.

At the same time, a growing number of payments are being made via ACH.

Nacha, which governs the ACH Network, said in February that the ACH Network saw payment volume rise 4.8% in 2023 compared to 2022, while payment value grew 4.4%.