SMART Data Foundry is to provide synthetic data sets to the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) in a bid to reduce the growth of Authorised Push Payment (APP) fraud.
Now the UK’s number one finance fraud type, APP grew 29% in 2021, accounting for 44% of all financial fraud and amounting to a staggering £583m in losses. 96% of all APP scams in 2021 directly affected consumers.
During a three-day TechSprint, financial services providers, innovators, academics, regulators, and technologists came together to find ways to tackle the biggest problem of the fraud epidemic – APP crime.
Smart Data Foundry used its leading-edge Smart Agent Simulation capability to create an agent-based modeling approach to generate a synthetic data set without commercial or privacy risk, as it was not created by cloning real data.
For the first time, the synthetic data is able to simulate events such as mobile phone conversations and emails and the associated connection with financial fraud to show the end-to-end story of APP fraud, as told through the eyes of data.
Bryn Coulthard, Chief Platform Officer of Smart Data Foundry, explains:
“Smart Data Foundry has united with fintech innovators to help tackle the UK’s APP epidemic. Our high utility Synthetic Data allows us to understand complex scenarios without exposing customer data as we work to solve our top financial fraud problem.
“Our work in partnership with the FCA and PSR helps to shine a light on the issues affecting consumers and how they are increasingly struggling to make ends meet, not just because of rising costs but also because of the ever-present risk of becoming a victim of a scam or fraud.”
Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA, said, “TechSprints bring together participants from across, and beyond the financial services sector, to develop technology-based ideas or proof of concepts that address and help provide solutions to industry challenges. These events help bring important systemic issues to the forefront, inform our thinking as a regulator, and provide a forum for collaboration and innovation.
“Using synthetic data helps bring to life the challenges we’re working to fix and lets the TechSprint participants quickly test ideas and show the art of the possible.”
Kate Fitzgerald, Interim Head of Policy at the PSR, said: “The PSR has been working to fight APP scams by driving the adoption of Confirmation of Payee and working with industry to improve data sharing for fraud detection, as well as improving reimbursement for victims via the CRM code. Most recently, we’ve set out our proposals to make reimbursement for victims mandatory.”
“The joint PSR and FCA TechSprint is a great opportunity to build on this important work. It gives us a chance to hear from people from a range of backgrounds, with different skills, to explore solutions to an issue that continues to have a devastating impact on so many. It plays a key role in more accurately illustrating the real-life scams people face and helping us all go further in tackling them.”