Data safeguarding is fast becoming the defining issue of the so-called fourth industrial revolution, as the spotlight is firmly turned on organisations’ data protection policies and data sharing activities.
High-profile data breaches, toughened regulations, state-sponsored hacking and poor integration of new systems into legacy IT architecture have all served to pull good data handling and security into sharp focus.
Furthermore in an age of lightning-fast technological innovation, heading off exploitation of advances by ever-more cunning fraudsters is a constant challenge.
In the UK, leading financial institutions are coming together to combat fraud risk and financial crime through collaboration, bucking the current trend for data silos, and sharing intelligence for the collective benefit of the group.
The successful National SIRA database convincingly underlines the importance of sharing information on potentially adverse activity, particularly in the banking and financial sectors.
In an industry where revealing suspected breaches of your defences is a highly sensitive activity, joining together in this way is a remarkably smart – and responsible – way of staying one step ahead of the criminals, before the dominoes fall.
A pilot program was set up by data solutions and software development firm Synectics Solutions in 2004 involving just three financial organisations – Paragon Bank, Abbey National, and The Cooperative.
The database was established as a living, breathing source of intelligence that allows the sharing and classification of data corresponding to adverse and risk-based applications with the overall aim of reducing losses.
The syndicated database gives members a broader perspective on an applicant’s financial behaviours, by accessing intelligence from a variety of other members and partners, which in turn enables confident decision-making, a quicker response and a positive customer journey.
Since its inception, the success of the database has been phenomenal. 14 years on and more than 130 organisations large and small have signed up to the collaboration, still managed by Synectics Solutions, representing almost three-quarters of the Retail Banking market.
The database has grown to represent over 200 million rows of data, constantly being updated and verified by fraud teams all over the UK, and growing at a rate of more than 35,000 entries every month.
Crucially, during its life the National SIRA database has helped to identify – and defend against – almost £4billion of fraud.
Now, each year,the SIRA application processes more than seven million credit card applications, five million current account requests, four million unsecured loan applications and allows compliance with Know Your Customer and Know Your Business stipulations.
“During its lifetime, National SIRA has played a central role in helping to fend off adverse and fraudulent applications,” explained Mark Haslam, Head of Product and Marketing. “It has saved billions that would potentially have been lost to fraudsters if it weren’t for the intelligence-sharing by those involved.”
He added: “As a group we have come a long way in helping to detect and prevent the evolving threat of financial crime, which is unrelenting. National SIRA provides the proof that when businesses work together to combat a threat such as fraud it is possible to make a real difference.”
Mark added that far from slowing down, the rate of SIRA membership is accelerating as companies seek out an effective defence against a multitude of evolving fraud typologies, and the technology powering the database evolves as a result of member feedback.
“Regular SIRA User Group and Steering Committee meetings give the SIRA community the chance to discuss challenges, opportunities and user feedback, all helping to shape the future of the program for the benefit of its members,” Mark said.
Over the years, advancements in the technology underpinning the database have brought even more power to the collaboration, including Real-Time screening, allowing SIRA members to carry out fraud checks at point of application or quote.
One leading UK ‘Challenger’ bank uses multiple datasets, including SIRA, as part of real-time fraud screening to ensure low risk applications experience a smooth customer journey, key to online-only success, and that adverse cases are spotted quickly.
A spokesperson said: “It’s vital that our fraud prevention controls and processes provide a frictionless application experience, whilst still enabling us to pinpoint suspicious application activity in a timely manner.
“Real-Time fraud screening against multiple datasets including bureau data, industry fraud data, such as Cifas and SIRA, and our own local application data complements this approach as it allows us to quickly and effectively determine the application fraud risks associated with applicants, ensuring low risk applicationsare able to progress straight through.
“On the flip side, where fraud risk concerns are highlighted, the ability to view all the key fraud risk information within the SIRA workflow, coupled with the flexibility to customise our fraud referral criteria and undertake fraudulent application data link analysis across the network of members, enables us to spot any suspicious applications and react to any emerging fraud trends with minimal inconvenience to genuine applicants.”
The SIRA program continues to attract new members from across banking, finance, insurance and now retail and telecommunications industries.
And in a further demonstration of the power of the database, SIRA members can now access the UK Government’s National Fraud Initiative (NFI) dataset.
The NFI data, from 22 different sources, includes millions of accurate and updated records, giving intelligence not readily available from other standard counter fraud or risk assessment solutions.
In total over 1,200 organisations regularly contribute to the NFI which spans a whole range of both local and central government departments and agencies.
Mark said: “To be able to open up this wealth of data to the National SIRA members bolsters the program and underlines the true benefit of collaboration within the financial industry, in staying one step ahead of potential fraudulent activity.”
For more information about the SIRA scheme, visit: www.synectics-solutions.com/Our-Products/sira