WASHINGTON, D.C. – The Financial Technology Association (FTA) today submitted a comment letter in response to a Request for Information from the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) regarding potential actions to address payments fraud. In its letter, FTA urged the regulators to jointly tackle emerging risks by modernizing anti-fraud tools, embracing digital solutions such as AI, and advancing a coordinated national strategy to combat fraud.
“Americans expect faster, safer, and more efficient payment methods,” said Penny Lee, President and CEO of the Financial Technology Association. “As bad actors leverage AI and exploit outdated systems like paper checks, we must harness innovative technologies, advanced detection tools, and better data sharing to combat these evolving threats. We applaud federal regulators for taking these steps to tackle fraud and modernize our payments systems.”
As fraud becomes more sophisticated and threatens non-card payments, such as checks and ACH transfers, new threats, including AI-generated schemes, are challenging traditional prevention methods. As digital natives, fintech firms are well-positioned to tackle these threats through innovative technologies and risk mitigation practices. However, to combat these evolving risks effectively, regulators and policymakers should prioritize modern policy frameworks, clearer regulatory guidance, improved data sharing, and enhanced collaboration between the public and private sectors.
FTA outlined the following recommendations to improve the effectiveness and responsiveness of U.S. fraud prevention in the payments context:
- Modernize regulatory compliance and supervisory frameworks to reflect evolving risks, including updates to BSA/AML programs, CIP rules, and CSI sharing, as well as enhancements in public-private and private-to-private information sharing.
- Facilitate responsible development and adoption of advanced fraud detection tools, including AI-driven solutions, by providing regulatory guidance and support for such adoption.
- Expand regulated access to core payment systems and modernize charter options to improve regulatory visibility, reduce reliance on intermediaries, and strengthen fraud detection across the ecosystem.
- Promote a transition away from paper checks to secure, traceable digital payment solutions in order to reduce fraud risk and improve payment security.
- Advance a coordinated national fraud strategy grounded in law enforcement collaboration, including through establishing a federal and state digital fraud taskforce, and investing in financial-awareness and education campaigns for high-risk groups.
Read FTA’s full comment letter here to learn more.
ABOUT US
The Financial Technology Association (FTA) is a network of fintech leaders shaping the future of finance. We champion the power of technology-driven financial services to catalyze innovation and advocate for modernized policies and regulations that reflect the digital transformation. Learn more at FTAssociation.org.
FTA Urges Federal Regulators to Modernize Anti-Fraud Tools, Embrace Digital Solutions to Combat Payments Fraud
WASHINGTON, D.C. – The Financial Technology Association (FTA) today submitted a comment letter in response to a Request for Information from the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) regarding potential actions to address payments fraud. In its letter, FTA urged the regulators to jointly tackle emerging risks by modernizing anti-fraud tools, embracing digital solutions such as AI, and advancing a coordinated national strategy to combat fraud.
“Americans expect faster, safer, and more efficient payment methods,” said Penny Lee, President and CEO of the Financial Technology Association. “As bad actors leverage AI and exploit outdated systems like paper checks, we must harness innovative technologies, advanced detection tools, and better data sharing to combat these evolving threats. We applaud federal regulators for taking these steps to tackle fraud and modernize our payments systems.”
As fraud becomes more sophisticated and threatens non-card payments, such as checks and ACH transfers, new threats, including AI-generated schemes, are challenging traditional prevention methods. As digital natives, fintech firms are well-positioned to tackle these threats through innovative technologies and risk mitigation practices. However, to combat these evolving risks effectively, regulators and policymakers should prioritize modern policy frameworks, clearer regulatory guidance, improved data sharing, and enhanced collaboration between the public and private sectors.
FTA outlined the following recommendations to improve the effectiveness and responsiveness of U.S. fraud prevention in the payments context:
Read FTA’s full comment letter here to learn more.
ABOUT US
The Financial Technology Association (FTA) is a network of fintech leaders shaping the future of finance. We champion the power of technology-driven financial services to catalyze innovation and advocate for modernized policies and regulations that reflect the digital transformation. Learn more at FTAssociation.org.