Top German banks form anti-fraud joint venture

Commerzbank, Deutsche Bank, and the German Savings Banks Association (DSGV) have formed a joint venture focused on financial crime.

The venture will develop a platform through which financial institutions can exchange information connected with fraud cases.

The system is intended to support secure and consistent exchange of relevant data.

The joint venture aims to create a data protection-compliant basis for sharing information across institutions.

Its product solutions are intended to help banks circulate relevant fraud indicators more quickly and identify suspicious activity earlier.

The first application will cover phishing, investment fraud, merchandise fraud, and love scams.

The application is already at an advanced stage of development.

Under the proposed process, a financial institution that identifies an account being used for fraud can share that information with other institutions through the platform.

Those institutions may then consider the information in their own fraud prevention processes and take protective measures where appropriate.

Each participating institution will remain responsible for assessing the information it receives and determining any response.

The platform will use cryptographic methods, including multi-party computation (MPC).

These methods allow institutions to compare selected information without disclosing all underlying data.

Data protection, purpose limitation, data minimization, and controlled disclosures form part of the planned approach.

The joint venture plans to add further fraud prevention functions and compliance-related applications over time.

The initiative also reflects changes to the European legal framework, including new payments-related requirements for financial institutions to exchange information in efforts against fraud and money laundering.

The venture is intended to supplement existing government and supervisory measures against financial crime rather than replace them.