The Financial Technology Consortium (FSTC) announced completion of a project studying financial transaction fraud across the entire financial services spectrum. According to the organization, this seven-month project resulted in the development of a fraud taxonomy model that can become an important tool in promoting financial institution collaboration in the war on fraud.
The Fraud Collaboration Project was launched in August of 2007 with goals of demonstrating the value of collaboration via a shared fraud pattern data base and identifying the infrastructure needed to make use of such a data base on a collaborative basis so that it's practical for financial institutions. Due to the complexity of the project, the team of participants broke into four work groups to complete the array of tasks that needed to be performed to achieve the project's goals. The groups were divided as follows: Research of legal and regulatory framework; Cataloguing of current anti-fraud initiatives and similar industry programs; Development of a taxonomy of financial fraud schemes with a glossary of terms to create a model to be used as common ground to support interactive collaboration within the industry; Development of an initial concept of operations for sharing of fraud data within the industry to detect, respond and investigate fraud.
The FSTC expects to expand the project to a second phase that will focus on developing more detail around the use of the taxonomy. It is likely to include detailed mapping of prevention technologies available today with the various schemes identified in the initial taxonomy; defining scheme signatures down to the lowest level; identification of cooperative loss reporting alternatives by taxonomy; and how to share real-time information utilizing the taxonomy.