Discovery Bank has almost eliminated EFT fraud

Discovery Bank has cut EFT fraud by 85% in the six months since the launch of its new TRUST Alert system, with it leveraging artificial intelligence (AI) to flag suspicious transactions. 

The bank is now planning to expand the TRUST system to more of its payment methods to further reduce the impact of criminal activity on clients. 

This is not only vital for improving customer experience and relations with the bank, but also keeps more money on the platform that generates fee and commission revenue or lending opportunities. 

As a result, the bank is investing heavily in its security frameworks to meet increasingly sophisticated threats from criminal actors. 

On 14 May, Discovery Bank revealed that its TRUST Alert system has been highly effective in this regard, with it being one of the few cases of profitable investment in new AI technology. 

“Since the introduction of the TRUST Alert in late 2025, Discovery Bank has recorded an 85% decline in confirmed fraud on flagged transactions,” the bank said. 

This has resulted in an estimated R100 million in potential losses for clients being prevented. 

B”uilding on this, TRUST Alert is now being expanded across more payment types, with the ability to block transactions mid-call to counter social engineering scams,” it said. 

The expansion will also enable the bank to place accounts into a secured Defence Mode instantly when unusual account activity manifesting in a serious threat is detected.

Discovery Bank CEO Hylton Kallner told Daily Investor that the bank monitors every single transaction conducted on its accounts in real time. 

“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 is what gives the bank the capability to alert clients to the danger of a suspicious transaction and prevent losses to the client. 

The main challenge is not fraud

Kallner explained that the main challenge with the TRUST Alert system is not the detection of fraud or loss prevention, but the occurrence of false positives. 

These false positives occur when the system flags a transaction as suspicious or fraudulent when it is, in fact, a completely legitimate transaction. 

This can be extremely frustrating for clients and undermine the purpose of the system, with Kallner describing them as the worst experience a client can have with a bank. 

As a result, Discovery Bank optimised its system to minimise the number of false positives that it sends to clients without sacrificing protection. 

The system works by analysing all EFT transactions conducted by Discovery Bank clients to determine which beneficiaries are common and reliable or are suspicious. 

If it is a common or reliable beneficiary, then the transfer can be conducted as normal without any intervention from the alert system. 

The behaviour surrounding a beneficiary is also analysed to determine the typical size of transfers, when they occur, and for what purpose they are made. 

“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.”

When the risk of a transfer being fraudulent is elevated, Discovery Bank sends a Trust Alert to the client to explain why the transaction has been flagged. 

This is not necessarily to convince the client that the transaction is fraudulent and should be stopped, but it introduces a moment of pause. 

A moment of pause often disrupts the urgency of a transaction, forces questions to be asked, and ensures the transfer is given adequate consideration. 

Kallner said that the bank will only block a transaction without a Trust Alert if the amount transferred is above a specific threshold or if the risk is extremely high. 

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.