De Nederlandsche Bank review finds payment fraud management at seven institutions is mostly operational rather than strategically steered

De Nederlandsche Bank has published an exploratory review of payment fraud controls at seven banks, payment institutions and electronic money institutions. It found that all seven had dedicated teams and had taken multiple steps to protect victims, identify perpetrators and prevent fraud, but that fraud management was generally organised at an operational level, with many key decisions made in day-to-day execution rather than against clear, well-substantiated strategic objectives. The review notes that banks and payment institutions play different roles in the payments chain and therefore use different tools. Banks detect and assess suspicious transactions, apply standard daily limits and a four-hour delay for changes to those limits, warn customers about risky payments and try to keep money mules and other fraudsters out of their services. Payment institutions focus on preventing payments to rogue webshops and other fraudsters through customer due diligence, monitoring refund requests and acting on fraud risks. At one institution that did set explicit strategic goals, DNB found that this contributed to reducing fraud. DNB describes the exercise as a first exploratory review. It is discussing individual strengths and weaker points with the institutions concerned and will take the topic forward through ongoing supervision and, where relevant, on-site inspections.