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In recent years, in the wake of the digitalization of financial services, fraud incidents and attempts have multiplied around the world. Faced with the emergence of fraudulent approaches, private institutions and regulatory bodies have deepened the discussion on ways to combat this phenomenon. In this debate, cooperation has come to the fore.
The understanding has been established that, in addition to the investment and compliance policies adopted by each institution, joint action makes it possible to combat financial fraud more effectively. Anti-fraud consortia have already been set up in various sectors with the aim of sharing knowledge, developing joint investment efforts and establishing unified responses against the actions of fraudsters.
Under this concept, Joint Resolution No. 6, which comes into force in November 2023, regulates the sharing of information on signs of fraud in Brazil. Institutions authorized to operate by the Brazilian Central Bank are subject to the regulation. Central Bank of Brazil, Such as banks and payment institutions. Consortium administrators are exempt from this obligation.
The sharing of information must comply with current data protection regulations, i.e. preserve the confidentiality of personal data and be based on the consumer's prior and general consent. This general consent exempts the institution from having to obtain authorization for sharing on a case-by-case basis.
The regulatory step that has just been taken is important because it establishes guidelines, clears up any doubts about data protection and creates enforcement so that the institutions regulated by the Central Bank contribute to the database. In addition, the requirement for interoperability of the systems used to report the information expands the range of information available.
The Resolution allows financial institutions to hire other companies to provide the data sharing service, benefiting from the expertise of the private sector, in particular the credit bureau sector, which anticipated the regulatory requirement and already has systems in place to share this information in accordance with the standard.
The theme of cooperation in the fight against fraud crosses borders. In the UK, the government published a document in May 2023 called “Fraud Strategy: stopping scams and protecting the public”. The text warns of the growth in the number of financial frauds and highlights a change in the profile of occurrences: between 2020 and 2022, fraudulent transactions with the inadvertent authorization of the victim rose from 44% to 54%, surpassing frauds without authorization. Among the pillars of the new strategy, the document stresses the importance of sharing information between authorities and private organizations, promising to address legal issues to ensure sharing in order to prevent economic crime.
In the European Union, the proposal to revise the Payment Service Direct includes creating a legal basis for financial institutions to share fraud-related information. In Spain, three major banks joined forces to create FrauDfense, is a collaborative platform for concentrating anti-fraud initiatives. One of the aims is to create a tool that allows information on fraudulent practices to be exchanged.
Joint Resolution No. 6 puts Brazil at the forefront of a global debate on a challenge of our time. The proposal is to combine regulatory efforts with the expertise of the private sector in order to guarantee security and strengthen confidence in the financial system.
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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor
