At the recent Payments Fraud and Security conference, a topic that came up regularly was the concept of data sharing to assist Banks and Financial institutions in the ongoing fight against fraud.

Data sharing for the purposes of fraud prevention is not a new concept, indeed, a number of influential parties have proposed a form of data sharing or a data hub, but the concepts never progress.

The proposal is a noble one - Fraud affects all parties and for the good of the industry is it not right to share information to reduce the overall risk and loss?

Indeed, on the acquiring side, there is a level of data sharing through the schemes when merchants are terminated for fraud, as the acquirer can review a database to determine whether there is a risk to taking on a new merchant. Likewise for a number of years, insurance companies have shared information on applications for motor, home and personal insurance, to assist in validating applications where there is a perceived risk (indeed guidelines have recently been published to improve the information within the submissions requesting information).

However, outside of these examples, there is a reluctance to give away too much information and assist a competitor. While Fraud information shouldn't be seen as competitive information, it is recognised that fraudsters will always target the weakest link. However, if an institution is seeing less impact on a particular fraud attack, they will see a benefit if other institutions are not as reactive.

When the performance of a fraud department is measured on the level of fraud loss, fraud managers will not want to share information that could affect other institutions. But there are other institutions that will be very keen to be in receipt of additional fraud data. Some institutions have limited resources, and one large fraud loss could easily wipe out an entire month's profit. Having access to fraud intelligence could be advantageous to smaller or new institutions. Again though, some institutions may not be keen to provide intelligence to the benefit of others.

So can it be done for the Banking industry, to improve fraud detection rates? There is certainly an argument to provide a "data hub" for the purposes of assisting all institutions, with smaller or new institutions benefitting greatly from this service. However, we need to get the industry to move away from the mind set of holding back information for competitive advantage, as while that is still in play, it will make an industry wide solution more difficult to attain.