EBA CLEARING furthers fraud-fighting functionality

Friday 15 September 2023 11:29 CET | News

EBA CLEARING has issued the specifications for its pan-European Fraud Pattern and Anomaly Detection (FPAD) functionality and is running analytical pilots, with nine banks engaged in the data model training.


The pan-European payment infrastructure provider also delivered a developer portal, including a sandbox, to support users in developing and testing FPAD’s application programming interfaces (APIs).

EBA CLEARING’s FPAD functionality and the fight against fraud

The announcement details that preparations for the go-live of FPAD functionality have made strides over the summer, with nine banks from six countries contributing to the data model training of the ongoing analytical pilot phase. The analytical pilot’s aim is to develop models that help identify fraud patterns in cooperation with users and to qualify anomalies based on their feedback.

FPAD is set to cover an extensive range of real-time fraud prevention and detection tools, including an IBAN/name check, to support the fraud-fighting efforts of payment service providers (PSPs) across Europe. The tools are to enable STEP2 and RT1 users to complement their individual risk view with insights on patterns and anomalies from a central infrastructure level perspective. 

FPAD will be an integral part of STEP2 and RT1, the largest payment systems for euro credit transfers and instant payments by volume and participation reaching every corner of Europe. The deployment is set to begin with a post-transaction investigation feature, together with transaction and account risk assessment functions, which can be leveraged by users prior to executing a transaction.

EBA CLEARING furthers fraud fighting functionality

When commenting on these developments, UniCredit officials stated that UniCredit values payment systems security as essential to protect customers, increase confidence, and better their user experience when leveraging digital banking products, and is looking to constantly implement solutions to improve the quality of antifraud controls. As instant payments are rapidly growing, a higher security level and better fraud-fighting tools are needed, and with FPAD, European banks are joining forces, with a systemic approach, to advance fraud-fighting capabilities in the SEPA perimeter.

Intesa Sanpaolo officials said that the recent increase in fraud trends and the usage of instant payments have required the company to broaden its view on payment transactions, and they believe that a shared international solution like FPAD, driven by the importance of real-time information sharing and data correlation, will help enhance their customer protection. More to this point, Deutsche Bank representatives stated that FPAD offers innovative solutions not only to address their own and their clients’ fraud risk but to further strengthen the entire SEPA payments ecosystem.

The surge in instant payments brought forth a demand for faster and better tools to combat fraud. Whereas criminals make use of extensive international networks, up until this point there has been no real cooperation among EU banks. LHV bank spokespersons believe this tool to come as the first step in levelling the playing field, enabling fraud teams across the SEPA region to access data that was previously unavailable, thereby enhancing the precision of their risk assessment.

EBA CLEARING representatives commented on the development, stating that together with these banks of different sizes and from different countries, they are training the fraud patterns and anomaly detection models, which are set to be used for every settled transaction to detect matching fraud patterns and anomalies, creating value for all STEP2 and RT1 users from the start. Per their statement, with the delivery of the specifications and the developer portal, participants can start their activities to integrate FPAD insights into their own fraud-combatting tools and processes.

EBA CLEARING’s FPAD functionality development started earlier in 2023, following the release of a blueprint and subsequent RT1 and STEP2 user consultation in Q4 2022. Per the announcement, STEP2 and RT1 are pan-European retail payment systems processing SEPA Credit Transfers and Direct Debits (STEP2) and SEPA Instant Credit Transfers (RT1) respectively, and both systems are owned and operated by EBA CLEARING, European-owned, -governed, and -regulated financial market infrastructure provider.

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Keywords: fraud prevention, risk management, SEPA, banking, data sharing, PSP, IBAN, financial crime, paytech, fintech, API
Categories: Fraud & Financial Crime
Countries: Europe
This article is part of category

Fraud & Financial Crime


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