Paytm Labs launches a fraud risk management platform, Pi

By Edlyn Cardoza

Paytm Labs, the advanced R&D division of FinTech giant Paytm, has launched Pi, an ML-powered fraud risk management (FRM) platform designed for FinTech, banks, and e-commerce marketplaces with high transaction volumes. Pi was developed from scratch at its innovation lab because existing fraud management systems were not fast enough or robust enough to handle the hundreds of millions of decisions required each day by Paytm.

Pi is handling five billion rule evaluations and 500 million decisions daily and is in use among some of the world’s largest FinTechs. These include PayPay, whose mobile money solution is Japan’s largest mobile payment app with 38 million users. It is also in use among several of Paytm’s fundamental financial properties, including Paytm Payments Bank, Paytm Money, and Paytm First Games.

“Thanks to Pi, we’ve reduced fraud to below 0.0005%—far below the industry average,” said Toshihiro Nomura, Head of Risk at PayPay. “The Pi platform gives us a holistic view of data and allows us to protect our business without stifling growth and without creating user friction.”

Pi was built with the speed of response in mind to reduce the mean time to react to threats. According to internal data, Pi can make decisions two times faster than the industry average, based on the fraud industry’s average decision-making time of 100-200ms. The system is built on auto-adjusting machine learning models, which have learned to identify patterns and outliers. It is also capable of addressing “unknown unknowns,” meaning that it future-proofs itself by evolving to react to unknown attack vectors that may appear in the future.

Part of the reason that Pi has been so successful is that it ingests data from throughout a financial provider’s ecosystem to pinpoint attack patterns. That holistic view is necessary to combat sophisticated fraudsters, as vulnerabilities can be exploited outside the company’s core technology stack.

“You cannot fight today’s fraud with yesterday’s technology,” commented Harinder Takhar, CEO of Paytm Labs. “We studied the solutions available on the market and concluded that nothing was able to operate at the levels that we needed. This was why we created Pi. We knew we had to start again with a fresh approach and design a fraud risk management system that was fit for purpose, and which could evolve as threats evolved.”

Pi is managed through a single centralised hub. Rules can be managed without the need for coding and can be edited in minutes via a low-to-no-code dashboard. It can be tailored to the needs of the FinTech, bank, or e-commerce marketplace within weeks.