Payments 20 (P20), the leading voice of the global payments industry, has published a new report entitled ‘Public-Private Data Exchange for Fraud Prevention: Best Practice Recommendations’ which calls for enhanced public and private sector data exchange using new methods and technologies to fight against increasingly sophisticated fraud.
It features contributions from leading organizations including J.P. Morgan, The Clearing House, McKinsey & Co., Featurespace, the Federal Reserve, FIS, Fiserv, UK Payment Systems Regulator, and Pay.UK on how the public and private sectors can work closer together to tackle the fraud epidemic.
In 2022, the Federal Trade Commission (FTC) highlighted consumers in the US lost nearly $8.8 billion to fraud, an increase of more than 30% over the previous year. In the UK, over £1.2 billion was stolen by criminals last year, equivalent to over £2,300 every minute.
While progress has been made to increase collaboration between the public and private sectors, the way fraud is currently tackled globally requires closer cooperation. Data is often held in multiple locations and data stores meaning a siloed, layered, complex system has evolved, requiring callouts to third parties. Efforts to collaborate on real-time data of transactions are also hampered by privacy laws such as GDPR, which uphold an individual’s fundamental right to privacy. This slows down attempts to combat fraud as soon as it is being committed.
Advancements and the adoption of new privacy-enhancing technologies (PETs) and artificial intelligence (AI) can not only help to resolve regulatory concerns of meeting privacy laws through protecting the consumer’s data but can also provide a further defensive armoury against modern cybercriminals. Beyond new technologies, increased engagement between public and private sectors on controlled data sharing could also help detect sophisticated fraud that any one organization can’t see alone.
Recommendations in the report, the third in a series from P20 on combating fraud and criminal transactions, include:
