What is MuleHunter.AI? RBI's latest tool against financial fraud explained

The Reserve Bank Innovation Hub has launched MuleHunter.AI, an advanced AI tool designed to identify and flag mule accounts, aiming to combat financial fraud and money laundering

The Reserve Bank of India’s (RBI) dedicated innovation unit, Reserve Bank Innovation Hub (RBIH) is making progress in combating financial fraud by promoting the use of MuleHunter.AI, an advanced artificial intelligence tool. This technology specialises in detecting and flagging mule accounts, which are often exploited for money laundering activities.

 

The tool has been successfully piloted in two public sector banks. According to the National Crime Records Bureau (NCRB), online financial frauds account for 67.8 per cent of cybercrime complaints, highlighting the critical need for effective AI-based fraud prevention solutions.

 

One of the major hurdles in combating financial fraud is the misuse of mule accounts. These accounts serve as crucial links in illicit financial activities, making tools like MuleHunter.AI essential for safeguarding the financial system and reducing cybercrime risks.

What are money mule accounts?  

As defined by the Reserve Bank Innovation Hub, ‘mule accounts’ are bank accounts used by criminals to funnel illicit funds. These accounts are often created by individuals who are either misled with offers of easy income or coerced into involvement. Their interconnected nature complicates the process of tracking and recovering funds.

Developing MuleHunter.AI

The Reserve Bank Innovation Hub collaborated with banks to evaluate existing methods for identifying and reporting mule accounts. Current rule-based detection systems often yield high false-positive rates and slow processing times, leaving many mule accounts undetected.

 

After analysing 19 distinct patterns of mule account behaviour in partnership with banks, the Reserve Bank Innovation Hub developed MuleHunter.AI to address these gaps. Early results indicate significant improvements in detection efficiency and accuracy.

How does MuleHunter.AI operate?

This AI/ML-powered solution surpasses traditional rule-based systems by leveraging machine learning algorithms. It processes transaction data and account details to predict mule accounts with greater precision and speed. By focusing on identifying the flow of illicit funds into mule accounts, this platform helps banks more effectively detect fraudulent activity within their networks.

 

The initiative underscores the growing importance of using innovative technology to tackle the escalating scale and complexity of financial fraud. The RBI presents MuleHunter.AI as a transformative step toward a safer and more resilient financial ecosystem.