MuleHunter.ai

Tags: Government Schemes

MuleHunter.ai

Why in the news?

• The Reserve Bank of India (RBI) hasdeveloped an AI/ML-based model called MuleHunter.ai to tackle the issue of mule accounts, which are used for financial fraud.

What is MuleHunter.ai ?

• TheReserve Bank of India Innovation Hub (RBIH) has introduced MuleHunterAI, an advanced AI/ML modeldesigned to help banks and financial institutions detect and mitigate mule accounts.
• Unlike traditional systems that often produce false alarms, MuleHunter.AI uses machine learning to quickly and accurately identify suspicious accounts by tracking illicit fund flows. 

Significance:

• This innovative approach helps banks detect fraud more effectively and efficiently, enhancing the security of India's financial ecosystem. 
• Early results show it significantly improves detection rates, marking a major step in the fight against financial crime.
•  "RBIH has developed an in-house AI/ML-based solution which is better suited than a rule-based system to identify suspected mule accounts. 
• Advanced ML algorithms can analyse transaction and account detail related datasets to predict mule accounts with higher accuracy and greater speed than typical rule-based systems.
•  This machine learning based approach has enabled the detection of more mule accounts within a bank’s system.

What is a mule account?

• A mule account is a bank account used by criminals to launder illicit funds, often set up by unsuspecting individuals lured by promises of easy money or coerced into participation. 
• The transfer of funds throughthese highly interconnected accounts makes it difficult to trace and recover the funds.
• These accounts help criminals launder money from cybercrimes.
•  According to the National Crime Records Bureau(NCRB), onlinefinancial frauds account for 67.8 percent of cybercrime complaints, highlighting the critical need for effective AI-based fraud prevention solutions.
• Mule account caseshave been on the rise, and a whopping 53% of the total fraud threats tofinancial institutions were caused by money mules in 2023.
•  Despite government and regulatory bodies actively working to fight this, cybercriminals continue to come up with innovative ways to circumvent the law and pursue money laundering activities.