EBA Clearing To Unveil Analytical Pilot For Pan-European FPAD Functionality

EBA Clearing has issued an announcement at its shareholders’ meeting that happened in Madrid. The announcement said that the agency would start the analytical pilot program for the pan-European Fraud Pattern and Anomaly Detection (FPAD) functionality in July 2023.

EBA Clearing to launch analytical pilot for pan-European FPAD functionality

EBA Clearing has also said that the pilot phase for this project has attracted STEP2 and RT1 payment service providers of different sizes across the European region. The analytical pilot program will also support EBA Clearing in validating and refining the fraud pattern and anomaly detection models alongside the participants.

This development comes amid the anticipated launch that happened in November 2023. FPAD will play a crucial role in the STEP2 and RT1 Services, and it has been designed to support the STEP2 and RT1 participants.

The underlying objective is to assist the user community in preparing for the growth of account-to-account transactions and enable vast instant payment adoption. FPAD will also enrich the individual risk view of PSPs with insights into the patterns and anomalies coming from the perspective of a central infrastructure level.

FPAD will also support PSPs to minimize fraud risk and also increase safety and customer trust in SEPA transactions. The pan-European FPAD will also be delivered using a phased approach.

The process will start with a post-transaction investigative attribute, transaction, and account risk assessment functions. These functions can be leveraged by users before a transaction can be executed.

The platform will also come with functionality where users will be forced to request an IBAN/name-matching check. This check will also address the fraud prevention requirements that have been put forward in the proposed Instant Payments Regulation.

EBA Clearing supports user needs

Erwin Kulk from EBA Clearing said that the services offered by the agency were customized to meet user needs as they actively contributed to the design and requirements. Kulk also said that the process involved having users be part of the analytical pilot program for FPAD.

Additionally, the platform was committed to driving the design and evolution of underlying models. The user-driven process will also see the FPAD creating real value for the user community and supporting the safety and overall customer experience of account-to-account payments.

Kulk further said, “We look forward to the insights from the analytical pilot to further fine-tune the functionality ahead of the go-live. We will also continue to intensify our exchange with the user community to ensure everyone can get ready to adopt and benefit from the solution from the start.”

The FPAD functionality by EBA Clearing started in early 2023 after the release of the RT1 and STEP2 user consultations during the last quarter of 2022. STEP2 and RT1 are ranked as pan-European retail payment systems that are used to process SEPA Credit Transfers and Direct Debits (STEP2) and SEPA Instant Credit Transfers (RT1).

The STEP2 and SEPA Instant Credit Transfers are systems owned and operated by EBA Clearing. EBA Clearing is owned, governed, and regulated in Europe by the financial market infrastructure provider.