Preserving Data Sovereignty in National Fraud Portals- a Distributed Data Architecture
FNA, Kimmo Soramäki, Florian Loecker · 2024
As a result of the widespread increase in consumer fraud and scams, several countries are looking to establish or strengthen cross-bank, cross-platform, and cross-industry utilities to counter fraud and scams on the national level and to augment traditional efforts at individual financial institutions1. However, questions quickly arise about how data on consumers and their payments can and should be shared across institutions. Some data sharing across Financial Institutions (FIs) is crucial for fighting consumer fraud and scams as it enables organizations to track fraudulent funds across the payment system, detect suspicious activity and anomalies effectively, and flag suspicious transactions that may go unnoticed if a bank can only access its own transactions data. This collaborative approach enhances the overall security of the financial ecosystem, allows for quicker responses to emerging fraud tactics, and helps create comprehensive fraud detection systems. Consequently, it protects consumers by reducing the incidence and impact of fraud, thus fostering greater trust and confidence in banking and payment systems.