Case Study: BankSphere — Preventing $28M in Fraud Losses With Real-Time ML
Overview
BankSphere, a top-10 global digital bank, faced increasing fraud attempts across card transactions, ACH transfers, account takeovers, and mobile banking activity.
False positives were frustrating customers. Fraud leaks were growing.
Logicwerk deployed a real-time fraud detection and behavioral analytics platform powered by streaming ML pipelines — enabling the bank to identify and prevent fraud within milliseconds.
Challenges
- Rising fraud losses driven by account takeover (ATO) attempts
- Legacy rule-based fraud systems generating high false positives
- Customer churn due to blocked legitimate transactions
- Growing fraud vectors across mobile, card, and online banking
- No real-time capability — 15–60 minute detection delays
Traditional rule engines were not sufficient.
Solution: Real-Time Fraud Detection Using ML & Streaming Analytics
1. Streaming Data Pipeline
Ingested real-time signals from:
- Mobile banking
- Card networks (Visa, Mastercard)
- Device fingerprinting
- Geo-location + VPN detection
- Historical transaction graph
- Behavioral biometrics
Built on Kafka + Flink + vector encoding.
2. ML-Based Risk Scoring
Models used:
- Behavior anomaly detection
- Historical similarity vectors
- Transactional graph embeddings
- Real-time user signature analysis
Models were optimized for:
- Latency < 20ms
- AUC-ROC > 0.96
- Minimal false positives
3. Rule + ML Hybrid Engine
Combined:
- Predictive risk score
- Business rules
- Regulatory constraints (PSD2, AML, KYC)
This ensured safe + auditable decisions.
4. Agent-Based Investigation Workflow
We deployed a Fraud Investigator Agent to:
- Summarize flagged incidents
- Propose recommended actions
- Auto-generate SAR/STR compliance reports
- Assist human analysts with explanations
All fully auditable and SOC2-compliant.
Results
🚨 $28M in fraud losses prevented (annualized)
Through real-time blocking of high-risk transactions.
🎯 45% reduction in false positives
Higher model precision = fewer frustrated users.
⚡ Detection latency reduced from 900ms → 18ms
Critical for seamless checkout experiences.
🔐 Stronger compliance with PSD2 & AML mandates
Automated audit trails and explainability.
Final Outcome
BankSphere transformed their fraud operations with real-time AI, resulting in safer transactions, happier customers, and dramatically reduced financial losses.
Work With Logicwerk
We help financial institutions deploy:
- Fraud ML pipelines
- Real-time scoring systems
- Agentic investigation workflows
- SOC2 & ISO-42001 AI governance