Commerzbank, Deutsche Bank, and the German Savings Banks Association have set up a joint venture to let institutions share fraud information.
The joint venture aims to enable financial institutions to share relevant information on fraud cases securely, consistently, and lawfully, creating a common basis for data protection-compliant exchange between institutions. According to the founders, fraudsters often use accounts at several banks and move funds between institutions within a short time, while individual banks have so far generally seen only part of the picture.
Sharing fraud signals with cryptography
The first application, already at an advanced stage of development, targets fraud types including phishing, investment and merchandise fraud, and romance scams. If an institution identifies an account being used fraudulently, it can share the information with other institutions through the platform, allowing them to take it into account in their own fraud prevention and act earlier. Each institution remains responsible for assessing the information and deciding on protective measures.
The platform uses cryptographic methods such as multi-party computation (MPC), which allow institutions to compare specific information without disclosing all of the underlying data. Data protection, purpose limitation, data minimisation, and controlled disclosure are central to the design. Bernd Spalt, Chief Risk Officer of Commerzbank, stated that financial crime is becoming increasingly professional and does not stop at company boundaries, making closer cooperation the right approach to identify risks earlier and protect customers.
A shared infrastructure for obliged entities
Fraud prevention is the first step, and the shareholders plan to expand the infrastructure gradually with further fraud prevention components and compliance applications. According to the founders, new European requirements in payments on information sharing between financial institutions to fight fraud and money laundering will create further opportunities for cooperation. The offering will also be opened to other obliged entities, complementing rather than replacing government and supervisory measures.
Dominik Hennen, Head of Personal Banking at Deutsche Bank, stated that fraud can be contained more effectively when banks share relevant findings securely and lawfully, combining data use, technology, and industry cooperation. Joachim Schmalzl, Executive Member of the Board of the German Savings Banks Association, stated that security in payments is not a matter of competition but a shared responsibility of the banking industry.
