By Ryan Weeks on 26th July 2018
The disruptor also says its disposable virtual cards have led to a 30 per cent reduction in card fraud.
Banking challenger Revolut has announced a pair of developments related to tackling fraud and money laundering.
Today, the app-bank reveals that its disposable virtual cards, launched in March, have resulted in a 30 per cent reduction in card fraud cases. The card details associated with these cards are instantly destroyed after payments, with new details automatically generated.
The idea is that if a large retailer is compromised, Revolut customers will be protected. Revolut founder and CEO Nik Storonsky pointed to the recent Ticketmaster breach – famously caught by Monzo two months ahead of its official announcement – as a ‘sharp reminder’ of why the virtual cards were prioritised.
“We believe that it’s our duty to use innovative technology to create new ways to protect our customers against fraud, and these new figures show that it’s working,” he said in a statement.
In tandem to these results, Revolut has announced a new algorithm which applies personalised transaction limits to customers based on their activity. Storonsky referenced this new system in the Financial Times piece about his firm’s money laundering issues.
Every one of the challenger's near 2.5m customers will now carry an individual risk rating, based on spending habits. Previously, all customers faced a fixed limit of £25k, beyond which they would have to go to extra lengths to verify their identity. But customers will start to notice those limits disappearing over the next few weeks.
Revolut has said in a press release that the new system will go ‘above and beyond’ typical risk assessments by profiling external parties, such as individual bank accounts, ATMs and e-commerce merchants. The firm hopes this will allow it to lock down ‘any complex transaction patterns and networks potentially related to criminal activity such as Money Laundering and Terrorist Financing’.
“We are incredibly excited to launch the new state of the art dynamic risk scoring algorithm that is completely unseen in the finance industry. This will allow us to really focus our investigation efforts in targeting the suspicious activity and allow our normal users to use Revolut hassle free,” said Alan Chang, VP of operations at Revolut in a statement.