Protecting Against International Payments Fraud – Considerations for Financial Institutions

Financial institutions can’t risk being complacent on evolving fraud scams – they need solutions that protect against current and future threats.

Criminals are not constrained by privacy rules, regulations, technology, or geographic borders. With increased scrutiny being placed on domestic rails, criminals are looking to new opportunities for fraud with less friction. These domestic protections are causing criminals to shift their focus to perpetrating international scams, with the City London Police estimating that 70% of fraud scams in the country have international origins. UK banks need to be prepared to work together to tackle this complex crime.

Payments Fraud in the UK
Payments fraud has costly consequences. In the first half of 2023, UK Finance found that £239.3 million was lost to authorised push payment fraud scams. These scams, where victims are deceived into sending payments to accounts under criminal control, are also irrevocable — they cannot be canceled or recalled, some settle instantly, and up to £1M can be sent in a single transfer. There is an extremely narrow window for detection and interdiction before fraudsters receive, and can immediately withdraw, massive amounts of funds.

Fighting Payments Fraud with Collaboration
Staying ahead of international fraud scams can seem impossible in isolation. Financial institutions need a unified approach to stay one step ahead of sophisticated fraud scams. By enabling collective intelligence using standardized, consortium-level data, institutions can develop anti-financial crime analytics that provide a more complete picture of risk across the financial system.

Collaborative frameworks enable financial institutions to deploy solutions that leverage consortium data, shared intelligence or responsible information sharing technology in concert with each other to optimize their anti-financial crime efforts. These frameworks enable institutions to identify patterns of criminal activity, evolving trends, and financial crime risks more effectively.

Preventing and detecting international payments fraud requires financial institutions to have visibility into both sides of a transaction, the originator, and the beneficiary. Consortium analytics provides this insight beyond the confines of a single institution. When thousands of institutions work together to fight payments fraud, with the power to profile counterparties beyond their own networks, your institution gains a better and more accurate view of risk.

Want to discover how your institution can fight payments fraud at home and abroad? On November 8, 2023, join myself and Jonathan Frost as we delve further into these issues and more. You can register here.

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