Featurespace Unveils AI ‘Large Transaction Model’ to Combat Fraud

Anti-fraud tech firm Featurespace has introduced TallierLTM, which it describes as the first artificial intelligence (AI) “large transaction model.”

The new tool, announced Tuesday (Oct. 24), is the industry’s first generative large transaction model (LTM), designed to offer a significant improvement when it comes to differentiating between genuine consumers and bad actors.

“What OpenAI’s LLMs have done for language, TallierLTM will do for payments,” David Excell, founder of Featurespace, said in a news release.

“There is widespread concern about how deep-fakes and generative AI have been used to deceive consumers and our financial systems. We plan to reverse this trend by utilizing the power of generative AI algorithms to create solutions that protect consumers and make the world a safer place to transact.”

PYMNTS and Featurespace collaborated on the recent report “The State of Fraud and Financial Crime in the U.S.,” based on interviews of 200 executives working at financial institutions (FIs) with assets of at least $5 billion, and found that fraud attacks are becoming more commonplace.

“A total of 62% of FIs surveyed said the volume of fraudulent transactions is on the rise, and roughly 22% said the pace remains the same,” PYMNTS wrote recently. “Only 16.5% said the volume is declining.”

And two-thirds of FIs reported gains in fraud rates, with more than half of respondents saying the monetary value of the fraud has increased.

“Those data points indicate that bad actors are, for lack of a better term, winning the battle as they seek to compromise systems and make off with stolen funds and stolen data,” PYMNTS continued, noting the increase in fraud involved most payment methods issued by FIs, although credit cards were particularly targeted.

While many FIs tell PYMNTS they plan to use artificial intelligence (AI) to combat fraud, Tobias Schweiger, CEO and co-founder of Hawk AI, noted the technology works both ways.

“The application of technology isn’t just reserved for the good guys … and bad actors are accelerating what I would call an arms race, using all of those technologies,” Schweiger told PYMNTS CEO Karen Webster last month.

“As a financial institution, one has to be aware of that accelerated trend and make sure your organization has enough technology on the good side of the equation to fight back.”