NetGuardians has improved fraud, scam and money mule detection through compatibility with EBA CLEARING’s FPAD initiative.
EBA CLEARING’s FPAD (Fraud Pattern and Anomaly Detection) is a pan-European initiative focused on delivering real-time tools for fraud prevention and detection. It comprises two features, including the introduction of IBAN verification check, which is projected to operate similarly to the UK’s Confirmation of Payee scheme. This approach proved effective in discouraging clients from falling victim to fraud.
The other element of the FPAD is the development of a fraud detection model that assesses the probability of fraud based on historical performance and the information found in payment messages. These two features aim to support users of STEP2 and RT1 systems by optimising individual risk assessment with insights into broader fraud patterns observed at the central infrastructure level.
NetGuardians' move follows heightened pressure on banks to outpace criminal networks. The new compatibility tackles this challenge by improving the accuracy of fraud detection and reducing false positives. It also comes amidst a time of increasing regulatory pressure in the UK, driven by the introduction of a liability shift for APP fraud. Additionally, across Europe, upcoming regulations such as PSD3 and PSR are set to require stronger fraud detection capabilities and customer protections.
As an official FPAD solution provider listed by the EBA CLEARING, NetGuradians uses a combination of community-driven insights and AI models for fraud prevention. The new integration of FPAD indicators into its solutions offers additional protection for financial institutions. The FPAD compatibility offers the benefits of intelligence sharing at scale, with indicators integrated directly into NetGuardians' AI models.
The FPAD solution is designed to improve, not replace, already existing fraud detection tools and processes, offering external indicators that support the efforts of individual PSPs. NetGuardians believes that fraud detection is a complex process which requires intelligence in the beneficiary and a network-wide view leveraged by AI. Its existing Community Scoring & Intelligence solution delivers this through collaborative insights. Adding FPAD to this service, the company is adding new intelligence to its offering, optimising its ability to better detect fraud in real time.
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