EBA CLEARING to kick off analytical pilot for pan-European fraud pattern and anomaly detection

EBA CLEARING announced at its Shareholders Meeting in Madrid today that it will kick off the analytical pilot for the pan-European Fraud Pattern and Anomaly Detection (FPAD) functionality in July 2023. The Company reported that the pilot has been attracting STEP2 and RT1 payment service providers (PSPs) of different sizes from all across Europe. The analytical pilot will allow EBA CLEARING to validate and refine the fraud pattern and anomaly detection models with the participants, in anticipation of the launch in November 2023.

FPAD will be an integral part of the STEP2 and RT1 Services and is being designed with the support of STEP2 and RT1 Participants. Its underlying aim is to help the user community prepare for the expected acceleration of account-to-account transactions and wider instant payment adoption, in particular. FPAD enriches the PSPs’ individual risk view with insights on patterns and anomalies from a central infrastructure level perspective. It will support PSPs in minimising fraud risk and thereby increase safety and customer trust for SEPA transactions.

The fully-fledged pan-European fraud prevention and detection functionality will be delivered in a phased approach, starting with the post-transaction investigation feature as well as the transaction and account risk assessment functions, which can be leveraged by users before executing a transaction. The latter will include functionality allowing users to request an IBAN/name matching check, which also addresses fraud prevention requirements set forth in the proposed Instant Payments Regulation.
Erwin Kulk at EBA CLEARING, said:

"EBA CLEARING’s services are tuned to our users’ needs because they actively contribute to the requirements and the design. By involving our users in the analytical pilot for FPAD, we ensure that they also drive the design and evolution of the underlying models. Because of this iterative and user-driven process, FPAD is expected to create real value to the user community and to help boost the safety and overall customer experience of account-to-account payments.

We look forward to the insights from the analytical pilot to further fine-tune the functionality ahead of the go-live. We will also continue to intensify our exchange with the user community to ensure everyone can get ready to adopt and benefit from the solution from the start.”

The development of EBA CLEARING’s FPAD functionality started in early 2023 following the release of a blueprint and subsequent RT1 and STEP2 user consultation in Q4 2022. STEP2 and RT1 are pan-European retail payment systems processing SEPA Credit Transfers and Direct Debits (STEP2) and SEPA Instant Credit Transfers (RT1) respectively. Both systems are owned and operated by EBA CLEARING, a European-owned, European-governed, and European-regulated financial market infrastructure provider.