How Technology is Facilitating Collaboration to Reduce Fraud


Organized fraud rings are growing more sophisticated, sharing technology, data and insights designed to defraud financial institutions. FinCEN is now encouraging banks and credit unions to share information about financial crimes in collaborative ways, anda nationwide network of fraud investigators is working together to stop organized fraud for the first time.

ID Insight, a Minneapolis-based national leader in developing solutions to prevent account takeover and new-account fraud, is applying its award-winning fraud-mitigation technology to its new Fraud Investigation NetworkSM, creating the unprecedented level of industry collaboration needed to detect and shut down fraud rings and schemes that target financial institutions.

The Fraud Investigation Network expands upon ID Insight’s fraud intelligence platform utilized by thousands of financial institutions across the country. For more than 15 years, banks and credit unions have improved their fraud detection by leveraging ID Insight solutions with a built-invelocity network that captures the repeated submissionof identity attributes across participating institutions nationwide.

With this new level of collaboration, fraud investigators nationwide now easily and automatically benefit from the investigative efforts and insights of their industry peers as they fight together to stop sophisticated fraud rings and schemes related to account takeover and new-account fraud.For the first time, available investigation insights around suspicious behavior from other institutions in the networkare automatically shared in real-time as alerts and messages to the entire network, bringing added authority to every inquiry result.

FinCEN, the Financial Crimes Enforcement Network at the United States Department of the Treasury, recently released clarifying information that encourages banks to share information about financial crimes. At the annual American Bankers Association/American Bar Association Financial Crimes Enforcement Conference in mid-December, FinCEN Director Kenneth A. Blanco announced that a provision of the USA Patriot Act allows banks to share more financial crime data among themselves.

Because completed investigations can be marked in one of two ways, either “fraud” or “not fraud,” it is possible to convert investigation results into a simple, binary variable – a 1 or a 0. Each 1 or 0 packs an incredible predictive punch and becomes part of the feedback loop that strengthens the platform’s predictiveness.Because the fraud intelligence platform already captures and codifies how investigations are ultimately resolved, all participating banks will benefit when these warning signals are provided back to other investigators in the network.

Fraud investigators are critical to the ecosystem of fraud prevention and detection, working on the front lines to save banking systems millions of dollars each year. The Fraud Investigation Network utilizes and amplifies their expertise for the entire network in the most efficient way possible. The outcome – forboth financial institutions and the entire industry – is truly greater than the sum of its parts. With the launch of the Fraud Investigation Network, financial institutions will improve the fraud catch rate, reduce fraud losses, reduce customer friction through fewer false-positive results, and improve the fraud investigators’ efficiency by pinpointing where they should focus their investigations.

ID Insight’s analysis identified multiple benefits for network users to defend against both new-account fraud and account takeover. One example: Through the use of this network, one major banking system would have found 4,000 additional fraudulent account opening cases representing over $600,000 in fraud savings over the course of one month. Because of the real-time alerts, financial institutions using the network will be able to act more quickly to prevent new-account fraud loss. Investigators are informed of likely fraud that happened up to several months before an inquiry, andongoing monitoring alerts them to fraud found by peers up to several weeks afterward.

It is important to note that no immediate adverse action is taken based solely on what investigators have shared as part of the Fraud Investigation Network. Although investigators will use the data to focus their investigations, they will still conduct full due diligence, reviewing all aspects of the case before determining whether it is “fraud” or “not fraud.” ID Insight’s fraud screening solutions come after, and are distinct from, the various consumer reporting/decisioning solutions governed by the Fair Credit Reporting Act (FCRA).

“Account takeover fraud continues to be a challenge, and more information sharing across departments as well as across institutions is necessary to thwart fraud across the board,” says Tracy Kitten, Director of Fraud & Cybersecurity at Javelin Strategy & Research. “Receiving information about emerging fraud schemes in real-time can only stand to benefit fraud and cyber teams.”

Financial institutions can benefit from the new Fraud Investigation Network through our distribution partners or directly through ID Insight. To view a short demonstration of the Fraud Investigation Network, check out this four-minute video, or contact usfor more information or to schedule a personalized demo. To learn more about ID Insight, visit

Adam Elliott is founder and president of ID Insight, which provides platform-based solutions to help financial institutions, credit issuers, online retailers and healthcare companies fight identity fraud. Before launching ID Insight in 2003, he was the President of ChexSystems, Inc., a subsidiary of FIS, a leader in providing risk and fraud solutions for the retail banking industry. Prior to FIS, Adam held analytic leadership roles at Deluxe, Time Life and Fingerhut. Contact him at or @ID_INSIGHT.