AI Is Reshaping Security: How Block Uses It to Help Protect Customers

This week, Block participated in the Financial Stability Oversight Council (FSOC) meeting in Washington, DC, where regulators and industry leaders discussed the role of artificial intelligence in financial services. James Nettesheim, Chief Information Security Officer at Block, joined the discussions representing Block’s security perspective on how AI is being used in production systems today.

AI is already embedded in how financial institutions detect risk and protect customers. At Block, it is built directly into security and compliance systems across Square and Cash App. It helps identify fraud, respond to threats in real time, and support consumer protection at scale.

As James noted in his remarks, “Over the years, we’ve used AI as part of our work to protect customers in real time. Today, we’re applying these proactive intelligence tools to increase our ability to analyze signals at scale, identify unusual patterns, and help prevent fraud and financial crime before it reaches consumers.”

In order to reduce new risk, Block applies a structured governance framework to AI systems, including internal review and approval before production use, ongoing risk monitoring and assessment, and visibility into how AI tools are used across the company. Third-party AI providers are also held to strict requirements, including restrictions on training data use, data retention limits, and contractual commitments to privacy and regulatory compliance.

Block conducts multiple transactions for millions of consumers and small businesses, operating in an environment where fraud, account takeover, and financial crime are ongoing industry challenges. Real-time machine learning models analyze transaction signals as they occur and help mitigate fraud and other potentially illicit transactions in flight and before they cause harm to our customers. Cash App’s payment warnings feature has now helped protect customers from more than $3.5 billion* in potential peer-to-peer (P2P) payment scams since launching in August 2020. We also use AI in our transaction monitoring to help identify patterns linked to structuring, money mule activity, and other illicit behavior.

As AI becomes more deeply embedded in financial services, Block continues to focus on clear controls, accountability, and transparency in how these systems are used to protect customers and stands ready to work with regulators as they continue to discuss the role of AI in financial services.

Click here to learn more about Block’s work to help combat fraud and scams.

*The $3.5 billion reflects the minimum dollar amount of highly probable payment scams Cash App prevented where customers did not complete the payment due to our scam warning since August 2020.