In a new paper, the U.S. Faster Payments Council (FPC) — the industry-led organization promoting payment-system improvements — argues more needs to be done beyond awareness campaigns and consumer education to stem the explosive growth of fraud in the space.  

The paper, titled Faster Payments Fraud Trends and Mitigation Opportunities, advocates for fraud-fighters to add machine learning and behavioral biometric tools to their arsenal — a recommendation very familiar to us here at BioCatch.  

This is a watershed statement on the state of fast-payment fraud in the United States and one I applaud. The Federal Reserve and other notable voices sit on the FPC’s committee on fraud. The industry — and I do mean all segments of the financial services sector — should take notice of the singularity of this paper’s posture, as it signals a shift already taken by other geographies on their faster payments journey.  

At BioCatch, we’re seeing Authorized Push Payments fraud (APP)  is now the most prevalent and fastest-growing type of fraud, increasing by 19% from 2022 and 2023. Our data also shows an increase in the unauthorized type of fraud, with Account Takeover fraud (ATO) growing in both sophistication and prevalence. 

Let’s pivot to how we fight back. The paper suggests a few industry-wide standards the financial services sector could install to drastically mitigate fast-payment fraud, including:  

• Widespread classification of fraud-reporting

• Tactical enhancements to authentication and identity controls

• Implementing a confirmation of payee consortium  

While widespread adoption of those standards would leave consumers more protected from fast-payment fraud than we are today, the FPC sees enhancements to real-time transaction monitoring with behavioral biometrics as the most critical measure banks can and need to take. Preach!   

The paper wraps by pointing out banks have a lot of work to do to build a unified framework for threat and risk information-sharing. Ken Palla wrote a blog for us on this subject.

Naturally, we are quite appreciative of these recommendations and conclusions, which reinforce our technology strategy and solution roadmap. From the growth and risk of APP scams where BioCatch has pioneered behavioral biometric machine learning models for efficient detection and response, to the ATO fraud types where we meet the noted sophistication by bad actors with our precision prevention solution, this paper aligns well with what we’ve been recommending for years.  

We’d love to help you align your team’s fraud mitigation roadmap with the conclusions of these respected thought leaders and be a part of the journey they believe “will lead to a successful industry-wide effort to prevent, detect, and mitigate faster payments fraud.”