New Forum Wants Banks Speaking the Same Fraud Language

The U.S. payments industry needs better collaboration on fraud data, according to the Accredited Standards Committee X9’s new Payment Fraud Forum. The forum, which begins its first meeting on September 10, aims to develop common approaches for identifying, categorizing, reporting and sharing fraud across various payment types, including ACH, wire, card, instant-payment, and check fraud.

Kyle Caldwell, VP of Fraud Product Management at The Clearing House, highlighted the importance of addressing this industrywide challenge. The current fragmentation in fraud data arises from each participant seeing transactions from their own perspective, often failing to recognize the complete pattern of fraudulent activity. This lack of interoperable fraud intelligence hinders effective aggregation of comparable events, making it difficult to utilize fraud data for prevention and mitigation.

By establishing a common language for describing fraud events, account behaviors, and payment risks, institutions can exchange useful intelligence without requiring identical fraud engines. This shift in focus from "Can my institution identify fraud?" to "Can the network recognize what my institution has learned?" could significantly enhance the U.S. payments system's fraud defense capabilities, particularly as middle-market firms increasingly become targets for fraudsters.