Federal Reserve Actions for Payment Security Fraud Definitions Work Group and Community Interest Group

Transcription

1 Federal Reserve Actions for Payment Security Fraud Definitions Work Group and Community Interest Group Federal Reserve Webinar January 31, 2019 Andrés Rapela Assistant Vice President, Secure Payments Ken Montgomery First Vice President & COO, Federal Reserve Bank of Boston Payments Security Strategy Leader, Federal Reserve System Tim Boike Vice President, Industry Relations

2 Welcoming Remarks Webinar Agenda Work Group Overview Work Group Recruitment and Community Interest Group Overview Open for Audience Questions Closing Remarks 2

3 Fraud Definitions Work Group Overview and Approach 3

4 Current Industry Challenge and Opportunity The Federal Reserve commissioned secondary research that identified inconsistencies in the classification and reporting of payments fraud data from study to study, and noted a significant lag between the reporting period and when study results become available. INDUSTRY CHALLENGE Inconsistent availability and classification of payments fraud data limits the effective, efficient, and timely cross-industry sharing of fraud patterns, trends, and losses; a contributing factor to missed fraud mitigation opportunities OPPORTUNITY Improve fraud data consistency to enable more effective, efficient and timely collection and sharing Optimize communication across the industry on payments fraud to maximize understanding and potentially enable more timely reporting and mitigation actions Focus effort on ACH, wire, and check fraud taxonomy given inconsistent availability of fraud data across payment types and industry interest in improvements 4

5 Desired Outcome Vision for a Consistent Payments Fraud Classification Model Researchers Processors FIs / Corporates Evolutionary Adoption Level 2 Broad Category (exhaustive) Industry-Aligned Fraud Classification Model* ACH Fraud Level 3 - Fraud Type Third Party Fraud First Party Fraud Various Fraud Taxonomies for Research, Processing, and Fraud Analysis Level 4 Fraud Sub-type (not exhaustive; flexible) BEC ATO ETC. Social Engineering Internal / Insider ETC. Mapped into consistent fraud classification structure for aggregate analysis, information sharing, & mitigation priorities Aggregate Fraud Profiles Information** * Example only; 4-level model/structure derived from: Developing a Taxonomy for Measuring Fraud presentation at Philadelphia Reserve Bank Conference, November 29 th, U.S. Department of Justice, Bureau of Justice Statistics. ** Known and emerging fraud profiles information only; no customer or PII data shared Industry Fed Gov. 5

6 Fraud Definitions Work Group A greater understanding of payments system fraud trends is essential for mitigating risk. The Federal Reserve sees value in evolving towards a more consistent and holistic U.S. fraud perspective through a collaborative approach with industry professionals. In its pursuit of this objective, the Fed is establishing and leading a Fraud Definitions Work Group that will: Bring together relevant expertise and diversity of thought from across the payments industry; Develop a fraud classifications model to help the industry more quickly identify fraud trends in ACH, wire and check transactions and; Propose a roadmap to encourage broad industry adoption of its recommended model 6

7 Work Group Activities and Projected Time Commitment Work Group Member Activities Contributes to refinement of proposed work effort (scope, milestones, work plan, key deliverables, etc.) Communicates and seeks input within organization on key decision points Socializes work efforts with constituents within industry and professional networks Participates actively, constructively and consistently in meetings and follows through on action items to drive the work to successful outcome Projected Time Commitment Work group duration ~9 to 12 months In-person meetings 3 to 4 (1.5 days each) Teleconference calls Biweekly (1 to 2 hours) Subcommittee work efforts as needed (1 to 2 hours/week) 7

8 Work Group Recruitment and Community Interest Group 8

9 Varying Levels of Engagement Available to the Industry Opportunities will exist for all payment industry stakeholders to be engaged and share their input on the final deliverables through different methods. FedPayments Improvement (FPI) Community All ~4,800 Subscribers FPI Fraud Definitions Community Interest Group Subset of FPI Community members interested in the fraud definitions topic (~200) and applicants not selected to participate in the work group Fraud Definitions Industry Work Group Small, nimble working group of industry leaders with specific industry expertise FPI Community FPI Fraud Definitions Community Interest Group Fraud Definitions Work Group 9

10 Desired Requirements of Work Group Participants For this small, nimble work group we are seeking industry participants who have familiarity and functional expertise in one or more of the following disciplines: ACH, Wire and Check Operations Fraud Systems Technology Risk Intelligence and Analytics (Data Collection and Reporting) Fraud Operations and Strategy Institutional Fraud Governance 10

11 Submitting Your Expression of Interest You can locate the expression of interest form on FedPaymentsImprovement.org 11

12 FedPayments Improvement Fraud Definitions Community Interest Group This group will have the opportunity to: Participate in input and feedback opportunities prior to the broader FPI Community Obtain regular updates on work group progress Invited to meet with Fed SMEs and/or work group members via teleconferences Join the Fraud Definitions Community Interest Group by submitting or updating your FedPayments Improvement Community profile and selecting ACH, Wire and Check Fraud Definitions as a topic of interest. 12

13 Next Steps Expression of Interest: Stakeholders interested in participating on the work group must submit an expression of interest form by February 14. Work Group Establishment: The Federal Reserve will select participants from the pool of interested candidates to ensure diverse stakeholder representation and strong expertise across the many needed disciplines by mid-march. Fraud Definitions Community Interest Group: Stakeholders may join this group at any time during the work group efforts by updating their FedPayments Improvement Community Profile. Individuals not selected for the work group will consult on the work as part of the Fraud Definitions Community Interest Group. Visit FedPaymentsImprovement.org to learn more or reach out to us at 13

14 Questions Questions? 14