Providing confidence in every payment

With the rising threat of authorised push payment (APP) fraud, TSB Bank, UK, partnered with Vocalink, a Mastercard company, to deliver real-time confirmation of payee and help to create a banking culture grounded in trust.  

'It leaves an indelible mark'

At its core, APP is this: a fraudster tricks an unwitting victim into authorising and sending a payment to a fraudulent account by misrepresenting who they are or what they do. So, what’s causing the recent upswing in APP fraud? The factors are varied. With bank accounts now virtually impenetrable, fraudsters bypass the bank and go straight to the customer. Increased digital usage has also led to changing behaviours and most recently with the COVID-19 pandemic, fraudsters have used the opportunity to zero in on people’s anxieties.

This sort of fraud takes as much of an emotional toll as a financial one. "Banks need to think about their customers and the impact [fraud] can have," says John Lyons, payments director at TSB Bank. "Think about losing your inheritance, losing your pension, losing your life savings. Even if you get some of that back through recompense, you know it leaves an indelible mark."

Anyone can be targeted by APP fraud. It’s not just the elderly or the digitally unsavvy, as many would expect; in fact, 18–35-year-olds are among the most common demographic to fall victim.

Recognising the rising challenge, Pay.UK, the UK’s leading retail payment authority, introduced Confirmation of Payee (CoP) in 2018 to help determine whether a payment request is legitimate or fraudulent. Confirmation of Payee is a fantastic proposal, Lyons says, but "it has a risk of being quite clunky from a customer experience point of view." So, TSB Bank set out to find a partner to help them fulfil their commitment to overdeliver on Confirmation of Payee.

TSB Bank finds a crime-fighting partner in Vocalink

In 2019, TSB partnered with Vocalink, a Mastercard company, to help them execute on this commitment flawlessly. The solution — Verify Account Name — uses account names and historical payment data to help tackle rising incidences of misdirected payments and APP fraud with heightened accuracy.

With accuracy essential to success, Vocalink research pinpointed a key concern in discerning fake account numbers from actual ones: the plethora of genuine account names that might be assigned to a single bank account. In fact, 60% of UK accounts have three or more name variations associated with them and 80% of transactions are sent to accounts with three or more name variations. This means seeking an exact name match risks unnecessarily flagging many legitimate payments.

Verify Account Name provides high confidence with low false rejection

Verify Account Name delivers efficient, effective payee confirmation while allowing for potentially thousands of variations in name spelling and format. As banks mobilise to close blind spots and share best practices and data at a network level, the larger set of AI algorithms available allow this solution to apply its verification technology to match name and name history with greater accuracy than other solutions currently in the market. 

It’s the data-science capability that, according to Lyons, provides the most value. "The value of partnering with Vocalink is the ready access to a wealth of data and data-science capability. By partnering instead of self-building, we had a massive head start for building a more frictionless experience for our customers."

Today, 95% of transactions now correctly score a strong positive match on average, resulting in a more positive customer experience without impacting legitimate payers and reducing friction for people when sending a one-off payment or setting up a new recurring one.

Foreseeing a future where fraud is no longer a concern

As digital banking reaches a point of ubiquity, customers need ongoing reassurance that their bank has a deep commitment to protecting and preventing fraud. The implementation of Verify Account Name is just one element of TSB’s larger, comprehensive strategy to reduce fraud’s impact on the community. 

By investing in technology, bold ideas and community-level education, TSB is helping to build a tomorrow where the economical and emotional impact of fraud is gone forever and confidence in every transaction is simply a given.

To learn more about Verify Account Name, just ask.