The innovative product is the first of its kind to use collaborative intelligence to analyze the behavior of the sender and recipient of a payment and estimate the risk of a real-time payment. It is constructed using fully supervised machine learning.

The new APP Fraud Solution from Form3 combines Feedzai's financial crime and fraud analytics with its account-to-account payment processing capabilities. This results in a model that is trained to recognize risk in both the sender and the recipient of the money. Being aware of the recipient of the money is essential to combating fraud because APP fraud entails impersonation to trick the victim into sending the money.

With the help of this new solution, fraudsters can no longer use intelligence gaps to target UK individuals and businesses with speedier payments. The model of the solution can then identify 95% of fraud at false positive rates that are typical for the market.

"The use of collaborative intelligence and cutting edge technologies that allow the real-time identification of scams within the payment message is the best way to tackle the rise of APP fraud," stated Mike Walters, CEO of Form3. By combining Feedzai's financial crime and fraud technologies with Form3's payment processing know-how, we can combat APP fraud and enable UK banks to process payments more quickly and securely. As two of the top four financial institutions in the UK choose Feedzai as their solution provider, we are working together with a market leader to tackle APP fraud.
 

Given that APP fraud losses amount to about £500 million annually, the solution is appropriate given that it was created in response to new Payment Systems Regulator regulations. According to this, banks will start paying back APP fraud victims in October 2024, and sending and receiving institutions will now be accountable for compensation.
 

"There is increasing regulation in this space, and rightfully so—we have to do everything in our power to protect the end consumer from APP fraud," says Pedro Barata, CPO of Feedzai. Since reimbursement will be required starting in October of this year, it is also in the best interests of all banks to work together to prevent fraud and save significant losses. We can significantly lower the degree of vulnerability in the payment process and provide our customers with the real-time intelligence they need to thwart fraudsters by combining the skills of Feedzai and Form3.
 

The collaboration is a testament to Form3's dedication to "doing well by doing good," as the company uses state-of-the-art technology to combat the widespread problem of fraud, which has had a significant negative impact on countless people all over the world.

The service will launch in April, and a complete UK market deployment is scheduled for the summer of 2024, just in time for the new regulations to take effect in October of the same year.