What measures are commonly adopted to combat fraud in Faster Payments?

Behavioral transaction monitoring is a widely adopted measure to combat fraud in Faster Payments. This technique involves analyzing customer behavior and transaction patterns to identify any anomalies or changes that might indicate fraudulent activity. By establishing a baseline of normal behavior for individuals or businesses, financial institutions can detect unusual transactions in real time. If a transaction deviates from this established pattern—such as a sudden large transfer to a new recipient—automated systems can flag it for further review or intervention.

This proactive approach allows organizations to respond quickly to suspicious activity, minimizing potential losses and protecting customers. It also enhances trust in the Faster Payments system, as users feel more secure knowing that measures are in place to safeguard their transactions.

In contrast, while transaction fees, limits on transaction amounts, and reduced processing speed may be considered in different contexts, they do not directly enhance the monitoring and responsiveness needed to address fraud effectively. Transaction fees could deter legitimate users or not address fraud directly, limits could inadvertently restrict users' needs, and reduced processing speed would negatively impact the efficiency of Faster Payments without providing a significant fraud-prevention benefit.