We live in a world with a transactional data landscape. Every minute of every day, simply by going about our normal day-to-day activities, we are generating information through the payments that we make.
In the UK, the amount of data created amounts to 11 billion yearly transactions and a total annual payments value of £6trn. Off the back of this growing trend, VocaLink has created Accura to apply cutting-edge data science techniques to payments data, developing solutions that solve known problems for the benefit of us all – including fighting fraud.
“Payments data – that includes transfers of money between bank accounts, or paying a bill by Direct Debit or standing order – is to some extent already being used in the fight against fraud,” explains Jim Wadsworth, Managing Director, Accura.
“Banks and other financial institutions use the data currently available to them to spot irregularities and anomalies that may indicate potential fraud.
But there are challenges, especially with non-card payments, where traditional anti-fraud solutions struggle to identify and flag fraudulent transactions before money leaves an account. Additionally, financial institutions currently only have a partial view of the scale problem (i.e. the total value of fraudulent payments), and of fraudulent payments and accounts within the banking system.”
Feedback from stakeholders, including banks, financial institutions and credit reference agencies, confirms interest in analysing payments data – but what does the public think about further analysis of their transactions to fight fraud?
This research suggests that people care more about combating fraud than they fear the misappropriation or misuse of transactional data. That gives the industry confidence to use transactional data to develop stronger protections against fraudulent activity.
This study also shows that people have concerns and suspicions about who is accessing their data and for what purpose. Even where an appropriate reason is declared, people may still lack a clear understanding of what is already happening.
Banks and financial institutions will need to provide an easy-to-understand explanation of the benefits to the public and address any specific concerns in order to ensure that people are comfortable with the analysis of transactions to help fight fraud.
The research gives the industry confidence to use transactional data to develop stronger protections against fraudulent activity, but it is equally clear that communication about the safeguards regarding using data in this way is a vital component in ensuring people’s acceptance.
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