Infy to club Nia with Finacle to detect bank frauds

Bengaluru-based IT major Infosys is in the process of integrating its artificial intelligence (AI) platform Nia with its banking solution Finacle, which is expected to help banks detect online frauds.

"We are working on integrating Nia into Finacle. We have some use cases on this, and we are surely working towards it. The AI of Nia will help banks in detecting frauds and secure customers," Infosys COO UB Pravin Rao told DH.

Infosys Nia is an Artificial Intelligence platform which collects and aggregates organisational data from people, processes and legacy systems into a self-learning knowledge base. It then automates repetitive business and IT processes.

The development holds significance as recently, public sector lender Punjab National Bank detected a fraud worth over Rs 12,000 crore by diamond merchants Nirav Modi and Mehul Choksi.

The fraud occurred because Letters of Understanding (LoUs) and international financial communication system SWIFT used by PNB did not get captured by its core banking software. State-owned PNB was apparently working to upgrade to the automated integrated version of Finacle for a year-and-a-half before the scam emerged.

"We will try to experiment and pilot the use of Nia within Finacle and see if from a larger fraud context, whether you can use machine learning to try to detect it in a much better way. But at the same time there has to be tightness in any process you deploy as well," he added.

Finacle is a core banking product developed by Infosys that provides universal banking functionality to banks. In August 2015, Finacle became part of EdgeVerve Systems.

Launched in 2003, Finacle is used by banks across 84 countries that serve over 450 million customers.

Several major customers of Finacle include Union Bank of India, Bank of India, Oriental Bank of Commerce, Punjab National Bank, J&K Bank, Bank of Baroda, and IDBI Bank, among others.

The company, however, said that the PNB fraud was not aided by any failure of its Finacle core banking software, but due to a breakdown of manual processes on the bank's end.

"On the PNB front, I just want to clarify that it has nothing to do with Finacle; it was a process failure," Rao said during the company's Q4 earnings call.

Instead, Rao blamed it on collaboration between the bank employees and alleged fraudsters. "You can have any strong technology, you can have any strong platform, but if there is a collaboration between the maker and the taker, it's very difficult for any system to prevent. It's more of a process failure than anything else," he added.