Swiss Firms Scramble to Stay Ahead of Fraudulent Activities as AI Technology Emerges as Key Weapon

Zurich, June 23rd, 2021 - A New Era in Fighting Financial Fraud

As financial institutions around the globe continue to grapple with the threat of fraudulent activities, a Swiss start-up has emerged as a key player in the fight against fraud. NetGuardians, based in Yverdon-les-Bains, has developed an artificial intelligence-powered technology that is revolutionizing the way banks and wealth managers detect and prevent financial fraud.

The Growing Threat of Fraud

According to a recent survey by PwC, nearly half of 5,000 companies polled worldwide reported suffering from fraud over the past two years. The global economic crime and fraud survey found that these fraudulent activities cost companies a staggering $42 billion in losses alone. Of these losses, only a small proportion are ever recovered.

The Weakness of Traditional Methods

While traditional methods such as application firewalls and two-factor authentication systems have been effective in preventing fraud, NetGuardians CEO Joël Winteregg believes that the human link remains the weakest point in the system. “A single phone call can do the trick and cause massive losses for a company or individual,” he warns.

The Power of AI-Powered Technology

NetGuardians’ AI-powered technology analyses financial transactions in three steps: anomaly detection, fraud recognition, and adaptive feedback. The software is able to immediately detect exceptional, fraudulent payments among billions of legitimate transactions processed annually by NetGuardians’ clients, which include over 60 banks and wealth managers worldwide.

A Growing Market

The global data protection market, valued at $15 billion in 2020, is expected to grow at a rate of over 30 percent annually between 2020 and 2027. While large players dominate the market in terms of revenue, NetGuardians competes with smaller actors such as BlockFraud, SEON, and identiq, all based in the US, UK, and Israel.

A Swiss Advantage

Geneva-based Temenos also offers AI-powered fraud prevention solutions, enabling clients to detect fraud and mitigate reputational risk. However, NetGuardians believes that its technology has a significant advantage due to Switzerland’s large number of banks, which provides access to vast amounts of real data for AI training.

A Collective Effort

The company is now focusing on sharing non-confidential client information between banks to create a collective AI learning platform. This would enable the algorithm to detect genuine accounts and payments, avoiding false alarms caused by one-off payments to unknown beneficiaries.

“We will move forward in this area in the coming months,” Winteregg says. “This will benefit the entire Swiss banking sector, ultimately leading to enhanced protection against fraud for Swiss banks - in the end benefiting all honest individuals and companies.”

Conclusion

In an era where financial fraud is becoming increasingly sophisticated, NetGuardians’ AI-powered technology provides a critical tool in the fight against fraudulent activities. By leveraging Switzerland’s vast amounts of real data and collaborative approach, the company is poised to make a significant impact on the global financial landscape.