Priya Patel
TLDR: Banks and CFOs need to develop data-sharing plans to effectively combat fraud, according to PYMNTS. A collaborative approach is essential in the fight against fraudsters, with CFOs and financial providers sharing data as a defense against bad actors. PYMNTS Intelligence data reveals that approximately one-third of Big Tech and FinTech firms have experienced fraud in recent months, and 43% of US FIs experienced an increase in fraud in 2023. The Faster Payments Council has observed an increase in authorized payment fraud, where fraudsters manipulate authorized parties and account holders into sending payments to them. The data also shows that a third of FIs not utilizing advanced technologies, such as machine learning and AI, have faced increased fraud. However, there are encouraging findings, with 47% and 42% of FIs utilizing cloud-based fraud and financial platforms and financial risk scores provided by their payments processors, respectively.
The article highlights the importance of data sharing via platforms in the fight against fraud, with financial risk scores dependent on various factors such as the sender, receiver, and relationship between the two parties. A collaborative network that facilitates data sharing is crucial to identify fraudulent behavior in real-time based on behavioral patterns and other characteristics. Platforms can also collect and synthesize data to gain insights into customer behavior and determine if authentication or friction is necessary in payment flows. PYMNTS found that 63% of CFOs surveyed reported using specialized automation for fraud prevention. Investment in fraud defenses has grown as businesses have shifted to digital channels during the pandemic.
