Payment fraud prevention: How to follow the money and recover more stolen funds

Payment fraud costs billions globally and the impact is devastating: not just for society but for customer trust, with one in four victims leaving their bank after experiencing fraud.

Criminals use cross-border payment systems to steal and then launder money quickly, moving funds out of reach before fincrime investigators may have even started looking into it.

Payment fraud also has several other names you may be more familiar with. It may be known as authorised push payment (APP) fraud, for example, or it can be given a more descriptive name like romance scam or investment scam, which describes how the victim was deceived. However, the issue is the same: victims are tricked into sending money to fraudsters. The good news is, the solution we’re sharing in this article can be used to stop many different types of fraud by following stolen money through the financial system.

In the video below, you’ll get a quick overview of how financial institutions can work together to disrupt the criminal flow and actually prevent payment fraud. Underneath the video, you’ll also find an overview of the video’s key concepts.

Understanding the criminal process

To stop payment fraud, we need to start by understanding how criminals work, which can be broken down into six stages:

• Idea generation: Spotting vulnerabilities that could work.
• Planning: Choosing targets and crafting scams, like romance fraud, fake investments, or bank impersonation schemes.
• Contact phase: Reaching out to victims via social media, email, phone calls, or messaging apps to build trust.
• Manipulation: Convincing victims to transfer money, often targeting traditional banks first, where savings may be held.
• Laundering: Moving stolen money through multiple bank accounts, known as money mule accounts. These accounts are often neobanks, fintechs, crypto firms, but may also be traditional banks too.
• Cash out: Once laundered, criminals withdraw the funds through e-wallets, crypto wallets, or as physical cash.

How financial institutions can stop payment fraud

The key to stopping fraud and recovering stolen funds is stepping in while the criminal process is still underway; while the manipulation and laundering is taking place, but before the stolen money is cashed out.

For example, as soon your fraud detection system flags a transaction as suspicious – e.g. a high or unusual amount, a new login pattern, or payments made to new recipients. By acting at this stage, when fraud is suspected but not confirmed, there’s more time to get ahead of the criminal.

Why is it so important to act as early as possible? Because even with warnings, victims often proceed with payments because they don’t know they are being scammed. Plus, the earlier we act, the longer that stolen funds will be in the financial system.

This is what Salv Bridge, our real-time intelligence sharing platform, facilitates.

How real-time collaboration stops fraud

Existing channels don’t give fincrime teams in different companies a way to communicate in real-time when fraud is suspected, which is key to stopping and then reversing stolen funds, as Jacob explains in the video above:

“Salv Bridge gives fincrime teams a real-time channel to exchange intelligence when fraud is suspected. Both teams can follow the money and potentially freeze the account to stop the funds from moving further.”

When fincrime teams share fraud intelligence in real-time, and not days later after it’s a confirmed case, there’s a much higher chance that the money can be recovered. Teams on both end of a suspicious transaction can then work together—which is known as a collaborative investigation in Salv Bridge–to track funds and freeze accounts.

The power of collaborative investigations

If you can follow the stolen money, you can protect your customers. Because even if the sending bank can’t stop a potentially fraudulent transaction for investigation, the next best step is to notify the receiving institution, so they can step in and help. This teamwork helps:

• Protect customers by acting quickly
• Freeze stolen funds while they are still in the financial system
• Expose criminal networks by connecting the dots across institutions

Proven results: the real impact of Salv Bridge

Even though we’ve focused on the theory in this article, Salv Bridge is driving really exciting results for fincrime teams across Europe:

“The average true positive rate of alerts sent through Salv Bridge is 90%, showing how effective suspicion-based collaboration can be. Companies using Salv Bridge have raised their fraud recovery rates to 80%, a huge step up from the typical industry average of 5%.” — Jacob Story — Head of Content at Salv

• 90% true positive rate: Suspicious activity alerts shared using Salv Bridge are highly accurate.
• 80% recovery rates: Institutions using Salv Bridge recover far more stolen funds than the industry average of just 5%.

How to start following the money

Salv Bridge connects over 70 banks, fintechs, and crypto firms across Europe, all working together to prevent payment fraud. To try it for yourself, join the next cohort before March 31. Spaces are limited to just 30 companies.

1. Fill out the form to register your interest
2. Speak with our team to see how Salv Bridge can help
3. Join the cohort and start testing real-time intelligence sharing