Discovery Bank cut EFT fraud by 80% in six months

Discovery Bank’s use of what it calls data intelligence has enabled it to cut electronic funds transfer (EFT) fraud by 80% since October 2025, as its digital systems flag suspicious activity and beneficiaries. 

Group CEO Adrian Gore pointed to this as evidence of Discovery’s investments in artificial intelligence (AI) and machine learning paying off. 

Speaking at the company’s interim results presentation, Gore said it is investing heavily in these technologies to the extent that it included them as a separate business unit in its reporting booklet. 

These investments include high-profile projects with Google and more particular product-specific enhancements, such as fraud detection. 

Gore explained that the bank provides almost the perfect platform to test its machine learning capabilities and build products using AI that have meaningful benefits for customers and the company. 

The example of EFT fraud was highlighted as a way to invest in technology that is not flashy but has real-world applications that form part of Discovery’s shared-value operating model. 

A reduction in fraud is a clear benefit for Discovery Bank clients, but it also benefits the bank in keeping more deposits on its platform and building trust with customers. 

Daily Investor asked the Discovery Bank CEO, Hylton Kallner, how this technology works and whether it is a blunt instrument.

Kallner explained that the bank monitors every transaction conducted on any of its accounts in real time. 

On the surface, this does not appear particularly impressive, but considering Discovery Bank tracks 9.5 million daily ‘data events’, the scale becomes notable. 

“That is the data intelligence we have been working on. Effectively, what we have done is build out AI monitoring of every transaction in real time,” Kallner explained. 

“If we identify anything that is out of range in terms of the client’s profile, their historic behaviour, or the beneficiary, our system flags it.” 

This not only makes Discovery Bank aware of the elevated potential for fraud but also enables it to send a push notification to alert the client to the danger and prevent a fraudulent transaction from taking place. 

False positives

One of the biggest challenges with rolling out such a system is the likelihood of it reporting false positives, which can have negative consequences for the bank’s relationship with its clients. 

“The challenge here is false positives. False positives, when you stop a payment that was legitimate, are the worst experience a client can have,” Kallner said. 

“So, what we aim to do is optimise our system to minimise the number of false positives without sacrificing the protection of the client.”

This all begins with the AI system analysing the beneficiary selected for the payment to understand whether it is a common recipient. 

If it is a common recipient with a high level of trust, the system then looks at recent activity around the beneficiary, using Discovery Bank’s transaction data to understand how clients interact with it. 

“If people like you do not interact with that beneficiary often or if there has been suspicious activity around that beneficiary itself, then the risk is immediately raised,” Kallner said. 

“Importantly, this is happening every single time, on every single transaction individually and in real time. The risk is being assessed constantly.”

If the risk is elevated, the bank will send the client a Trust Alert and explain why the transaction has been flagged. This forces the client to pause and reassess the transaction. 

Kallner said if the transaction goes above a specific threshold, then it will be blocked. 

“It is an amazing use of AI technology to assist clients and protect them. It ranges from false voices, being phished, socially engineered, and online purchases from social media ads,” Kallner said. 

This ties into Discovery Bank’s other security features, which aim to protect clients against other forms of fraud, including cloning and card fraud. 

The bank has also added an additional layer of security to move clients’ most valuable accounts to a digital vault that can only be accessed via a client-selected security code. 

Besides hiding the account, it also allows clients to enter a custom panic code to silently alert Discovery Bank if they are accessing these accounts in the digital vault under duress.

“We’re patenting this as an industry first. Once you enter your chosen panic code, transactions will continue to be processed as normal, but it will alert our fraud management team,” Kallner said.