Synthetic data to fight against online banking fraud


A Scottish firm is working with the Financial Conduct Authority to tackle an ‘epidemic’ of online fraud.

Smart Data Foundry, a spin-off from the University of Edinburgh’s £600m data-driven innovation programme, will work with the FCA and the Payments Systems Regulator (PSR) to help tackle the growth of online bank transfer fraud known as authorized push payment (APP). ) fraud.

During a three-day TechSprint, more commonly referred to as a hackathon, financial services providers, innovators, academics, regulators and technologists came together to find ways to tackle fraud’s biggest problem. digital.

Smart Data Foundry used its Smart Agent Simulation software to create an agent-based modeling approach to generate a synthetic dataset without commercial or privacy risk, as it did not clone any real data.

For the first time, participants used data to simulate events such as mobile phone conversations, emails and the associated connection with financial fraud to show the end-to-end story of APP fraud, across data eyes.

APP is now the number one type of financial fraud in the UK, accounting for 44% of all financial fraud and amounting to £583m in lost money. The type of scam affects consumers more than anyone.

Bryn Coulthard, Platform Director of Smart Data Foundry, said: “Smart Data Foundry has partnered with fintech innovators to help tackle the UK’s APP epidemic. Our very useful synthetic data allows us to understand complex scenarios without exposing customer data while we work to solve our main problem of financial fraud.

“Our work in partnership with the FCA and PSR helps shine a light on the issues affecting consumers and how they are finding it increasingly difficult to make ends meet, not just because of rising costs, but also because of the ever-present risk of becoming a victim. cheating or fraud.”

Jessica Rusu, FCA’s Head of Data, Information and Intelligence, said: “TechSprints brings together participants from across the financial services industry and beyond, to develop ideas based on technology or evidence of concepts that address and help provide industry solutions These events help highlight important systemic issues, inform our thinking as a regulator, and provide a forum for collaboration and innovation.

“Using synthetic data helps bring the challenges we strive to solve to life and allows TechSprint participants to quickly test ideas and demonstrate the art of the possible.”

Kate Fitzgerald, Acting Head of Policy at the Payments Systems Regulator, added: “PSR has been working to combat APP scams by driving the adoption of beneficiary confirmation and working with the industry to improving data sharing for fraud detection, as well as improving reimbursement. for victims via CRM code. More recently, we presented our proposals to make reimbursement to victims mandatory.

“The PSR and FCA TechSprint are a great opportunity to build on this important work. It gives us the opportunity to hear from people from diverse backgrounds, with different skill sets, to explore solutions to a problem that continues to have a devastating impact on so many. It plays a key role in illustrating more accurately the real scams people face and helping us all go further in their fight.

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