Sharing is Caring: The Fraud ‘Consortium’ Effect

Financial institutions are slowly waking up to the realization that well-organized fraudsters are exploiting information gaps across the U.S. financial system. Fraud data sharing offers a necessary response to these gaps. Data sharing not only protects the overall integrity of the financial system, it can dramatically reduce fraud losses and customer friction. However, integrating external data into a financial institution is not always simple. More data is not always better. Models also vary significantly across ownership, structure, and focus. In this fragmented ecosystem, the boundaries are blurring between fraud vendors and consortiums as each is increasingly incorporating additional signals, specialized AI models, and real-time risk scoring. Consequently, selecting the right network requires identifying the particular use case, finding representative data, and integrating the data into an organization’s internal workflow. 

This report makes the case that fraud data sharing is a necessary tool for financial institutions, and it walks through the steps to identifying a good fit. Javelin also addresses many of the hurdles to sharing fraud data, such as regulatory risk, privacy, and a fear of losing competitive advantages. By overcoming these challenges, financial institutions can realize the many benefits of institutional data sharing in fraud management. 

Key questions discussed in this report:

• How can sharing fraud data improve the customer experience?
• How can a financial institution find the best fraud network for its needs?
• What can financial institutions do to manage regulatory risk and privacy concerns while sharing fraud data?

Companies Mentioned:

Advanced Fraud Solutions, Baselayer, BioCatch, Certegy, Credit Industry Fraud Avoidance System (CIFAS), Early Warning Systems (EWS), Experian, FIS, FiVerity, FraudNet, Group-IB, IPQS, LexisNexis Risk Solutions, Mitek, Nasdaq Verafin, NICE Actimize, OrboGraph, Outseer, ProSight Financial Association, Sardine, Sift, Socure, TransUnion, Unit21