Banks to pool fraud data

Financial services organisations share intelligence in drive to combat crime

High-street banks are working on a pilot project for sharing fraud data via a secure online site, Computing can reveal.

The portal will pool data about fraud cases and the beneficiaries of fraudulent payments across the industry, rather than each bank looking at fraud in isolation.
‘The project is now in a pilot phase, with just a handful of banks involved,’ said a spokeswoman for financial services trade body Apacs.

The scheme is the latest in series of initiatives involving government, the financial services industry and law enforcement agencies to combat fraud and other financial crimes via closer collaboration and data sharing.

A number of projects aimed at linking information from different organisations to provide more intelligence data are being worked on.

The Insurance Fraud Bureau, set to be operational early next year, will use shared insurance data and new analytical techniques to detect organised fraud. Pilot projections from the Financial Services Authority (FSA) suggest the sector could prevent £200m worth of fraud a year.

Apacs and Cifas, the UK’s fraud prevention service, are looking at ways to share data about staff dismissed for dishonesty and fraud.

Apacs is also developing a standard for a common device for use by consumers to physically authenticate online transactions to cut phishing and other internet-based fraud (Computing, 14 April).

Retailers in London’s West End are also considering collaborative reporting systems.

Philip Robinson, the FSA’s financial crime sector leader, says there have been encouraging signs of an increasingly joined-up approach in the fight against fraud. ‘I hope this means that the days where firms see sharing fraud data as damaging to their reputation, or as ceding a competitive advantage to their rivals, are long gone,’ he said.

LloydsTSB head of group fraud and intelligence Ken Farrow says fraud is not viewed as a competitive issue. ‘We’re all in this together,’ he said.

At a national level, the government is also consulting with various industry stakeholders about the possibility of establishing a national fraud strategy.

Speaking at the FSA’s annual financial crime conference this week, UK attorney general Lord Goldsmith said the best way to combat economic crime is to adopt a consolidated approach.

‘We need to bear down on fraud and make sure our laws and procedures are fit for the 21st century, so we can tackle sophisticated economic crime vigorously and effectively,’ he said.