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Mastercard (MA+0.74%) will acquire global threat intelligence company Recorded Future for $2.65 billion, as it looks to build up its digital security amid a changing fraud and cybercrime landscape.
The credit card giant’s purchase builds on its existing fraud prevention and cybersecurity services, which leverage artificial intelligence and other advanced technologies to combat growing financial crime, Mastercard said Thursday.
Boston-based Recorded Future, which is currently owned by private equity firm Insight Partners, is the world’s largest threat intelligence company, with more than 1,900 clients across 75 countries, including 30 federal governments and more than half of the Fortune 100.
“Recorded Future adds to how we deliver that greater peace of mind before, during and after the payment transaction. Together we will innovate faster, create smarter models and anticipate emerging threats before cyber-attacks can take place – in payments and beyond,” Craig Vosburg, chief services officer at Mastercard, said in a statement.
The deal is expected to close by the first quarter of 2025, pending regulatory review and other closing conditions.
This comes as the shift to an increasingly digital financial landscape, like online payments, withdrawals, and deposits, continues to make crime within the global financial system more pervasive. More than half of Americans use digital wallets more than their cards or cash, according to the results of a Forbes Advisor poll published last year.
An estimated $3.1 trillion in illicit funds passed through the global financial system last year, according to a Nasdaq’s (NDAQ+1.07%) latest Global Financial Crime Report. Money laundering alone accounted for trillions of dollars that helped fund international criminal activities, including $346.7 billion in human trafficking, $782.9 billion in drug trafficking, and $11.5 billion in terrorist financing.
This year alone, cybercrime is projected to cost $9.2 trillion globally, according to Statista.
While financial criminals are getting smarter — particularly with the advent of AI and generative AI — financial institutions and RegTech companies are deploying many of the same technologies to help combat the growing criminal enterprise. Both Mastercard and Recorded Future already use AI to analyze billions of data points to identify potential threats, Mastercard said.
AI has helped financial institutions identify and stop risks considerably. HSBC (HSBC+1.83%), for example, uses its AI system, co-developed with Google (GOOGL+1.44%), to monitor about 1.2 billion transactions for signs of financial crime across 40 million customer accounts each month, Jennifer Calvery, group head of financial crime risk and compliance at HSBC, wrote in a June blog post. It claimed to spot two to four times more financial crime than it did before, with 60% fewer false positives.