ECB hires AI startup to fight fraud in digital euro launch

The European Central Bank (ECB) on Thursday chose Portugal-based startup Feedzai to help with fraud detection and prevention for the bank’s digital euro. The financial institution has awarded about five tenders in connection with the planned launch of the digital euro.

ECB introduced its central bank digital currency (CBDC) project in 2021, with its launch expected in 2029. The bank acknowledged that the awarding of the tenders signals the launch of the project’s second phase of preparation.

ECB awards tenders to five companies 

ECB’s second phase of its project includes an agreement struck with vendors for the risk and fraud management feature. According to the report, the component has an estimated value of between €79.1 million and €273 million.

The bank announced that Feedzai will collaborate with subcontractor PwC to provide a fraud detection and prevention service in accordance with the EU’s data protection, security, and privacy standards. The ECB stated that Feedzai’s platform will provide a fraud risk score for every transaction. The initiative will enable payment service providers to combine the data with their own before deciding whether or not to approve payments.

“With tens of billions of transactions expected across the eurozone, success depends on AI that can adapt as quickly as fraud evolves. Our role is to provide the intelligence that keeps even the most sophisticated fraud out, ensuring trust in every digital euro transaction from day one.”

-Nuno Sebastiao, CEO and Co-Founder of Feedzai

The central bank also selected Germany-based Giesecke+Devrient as another vendor. The firm will collaborate with Nexi and Capgemini on the development and implementation of an offline solution to complement the digital euro.

The ECB chose Sapient GmbH & Tremend Software Consulting S.R.L. for pseudonym lookups. The bank also selected Almaviva SpA & Fabric SpA to work on its app and software development kit (SDK). Senacor FCS will also secure the exchange of payment information for the digital euro within financial institutions.

The central bank maintained that it will only decide to issue the digital euro once the Digital Euro Regulation has been adopted. The ECB also stated that the actual development of the components will be decided at a later stage, pending the bank’s Governing Council’s decision on the potential next phase of the project.

ECB notices a drop in euro cash use

Member of the ECB Executive Board, Piero Cipollone, spoke at the Baltic conference Payments & Policy in a Changing Environment, and said the digital euro is essential to preserve European’s ability to use sovereign money as transactions get increasingly digitized. He added that the digital euro would maintain legal-tender choice across the region, strengthen competition for payment services, and support the cross-border scale of European fintechs and banks.

Cipollone noted that the share of cash used for sale in the euro dropped from 72% in 2019 to 52% in 2024 in terms of volume, and fell from 47% in 2019 to 39% in 2024 in terms of value. The ECB revealed that the role of cash in all-day-to-day transactions has been declining at a faster pace as the role of online payments increases.

Cipollone also claimed that the project’s geopolitical dimension of reduced reliance on non-European payment schemes protects Europe’s economic sovereignty and lowers costs for merchants and consumers. He added that the project includes a distributed infrastructure across multiple regions, a dedicated ECP digital euro app that enables seamless provider switching, and offline functionality.

According to NTT Data’s ‘Banking Trends 2025’ report, more than half of UK banks considered using generative AI for fraud prevention. The report suggests that AI will be key to fraud prevention, with nearly 40% of firms beginning to implement GenAI in their systems. 

Lloyd joined the AI sector in 2024, with the announcement of its ‘AI Centre for Excellence’ led by former Amazon executive Rohit Dhawan. The financial institution acknowledged that it was integrating AI and analytics to detect early warning signs of fraud.

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