The Financial Services Technology Consortium (FSTC) completed Phase II of a project series aimed at studying financial transaction fraud across the entire financial services spectrum. This second phase of the Fraud Collaboration Project updated the initial taxonomy drafted in the first project phase, conducted a technology survey and designed initiatives to promote further collaborative efforts within the industry, according to the organization.
The team of members eliminated, modified and added crime categories and methodologies as well as payment channels, types and accounts as deemed appropriate. The Phase II draft also includes rudimentary definitions aligned with general crime methodologies. Additionally, the team surveyed companies offering technological countermeasures and used the data to line up their solutions with the FSTC model to help demonstrate the value of a common communication model.
Next steps include a longer-term plan to coordinate several industry initiatives focused on promoting financial institution collaboration against fraud attacks:
1) Fraud Specific Interest Forum (SIF): Formation of a collaboration team as a core group of industry professionals interested in collaboration to fight payments fraud. This team will meet monthly to stay abreast of industry initiatives and leading fraud-fighting technology.
2) Promote Industry-Wide Collaboration to perfect the Payment Fraud Taxonomy and associated glossary.
a. Recruit key organizations with specific expertise to build out multi level taxonomy details associated with the model's vertical categories (payment type, channel, account). Example: NACHA to address ACH.
b. Create an online environment for individual access and input supporting further improvements (model modifications, glossary expansion, corrections, and improvements).
3) Reporting Pilot Special Interest Group (SIG): Experiment with new methodologies to attempt near real-time value add fraud data sharing between interested financial institutions and possibly other stake holders (law enforcement, government, merchants, others).
New York-based FSTC launched the Fraud Collaboration Project in August 2007. The goals were to demonstrate the value of collaboration via a shared fraud pattern database and to identify the infrastructure needed to make use of such a database on a collaborative basis that is practical for financial institutions.