RBI Arm Pilots AI Based Solution To Detect Mule Accounts
This model enables detection of mule bank accounts in an efficient manner and a pilot with two large public sector banks has yielded encouraging results.
The Reserve Bank of India has encouraged banks to collaborate with its subsidiary Reserve Bank Innovation Hub on its new initiative--MuleHunter.AITM--to detect mule accounts, a pilot being run based on artificial intelligence and machine learning model, Governor Shaktikanta Das said.
"MuleHunter is basically an infrastructure level setup we are creating, which will use the data bases from all banks, payment operators and its AI engine is trained to use this wide set of data to be able to identify frauds, etc. much more effectively," Deputy Governor T Rabi Sankar explained.
This model enables detection of mule bank accounts in an efficient manner and a pilot with two large public sector banks has yielded encouraging results, according to the statement on developmental and regulatory policies.
"Banks are encouraged to collaborate with RBIH to further develop the MuleHunter.AITM initiative to deal with the issue of mule bank accounts being used for committing financial frauds," the statement said.
The idea behind introducing this is to create an infrastructure level facility, which everyone can use, as several banks and participants cannot devote enough resources for such uses can actually use this and even for the well developed this is an option, Sankar said.
"If you see the amount of frauds are increasing, but number of frauds per transaction has come down over the years. However, the number is increasing fast enough for us to be concerned about it," Sankar added.
This initiative has come as the RBI has been taking various measures in coordination with banks and other stakeholders to prevent and mitigate digital frauds in the financial sector. This includes guidelines on strengthening cybersecurity, cyber fraud prevention and transaction monitoring.
Use of money mule accounts is a common method adopted by fraudsters to channel proceeds of frauds and the central bank is currently running a hackathon on the theme "Zero Financial Frauds". This includes a specific problem statement on mule accounts, to encourage development of innovative solutions to contain the use of mule accounts.
