Dive Brief:
- Plaid launched a network called Beacon, which aims to help banks and fintechs identify and combat instances of repeat fraud, the fintech announced Thursday.
- The collaborative anti-fraud network is “designed to stop the chain reaction of fraud that occurs when identities are stolen and accounts are compromised,” the company said.
- Participating members can report instances of fraud via Beacon’s application programming interface or Plaid’s dashboard, the company said. Contributors can screen new sign-ups or users against the Beacon network in real time to detect whether a specific identity has been associated with certain types of fraud, Plaid said.
Dive Insight:
Similar to how banks have access to shared fraud intelligence, Plaid said it wants to bring that same technology to fintechs and banks.
“Plaid sits at the center of the multi-sided digital finance ecosystem – spanning banks, credit unions, thousands of leading fintech apps, and millions of consumers,” Alain Meier, Plaid's head of identity, said in a blog post Thursday. “With Beacon, we are uniting the ecosystem to share fraud insights across digital finance providers and create a mechanism to verify if personal identifiable information has been abused, re-used, or recycled across platforms.”
Losses associated with fraud are rising in the U.S. Consumers reported losing nearly $8.8 billion to fraud in 2022 — an increase of more than 30% over the previous year, according to the Federal Trade Commission.
The launch of Beacon follows several other product rollouts that expand Plaid’s offerings beyond bank data aggregation.
The company last year launched a feature that fast-tracks verifications across Plaid-powered apps and services. The firm has billed the service as a “one-click checkout” for identity verification that is compliant with know-your-customer standards.
The fintech in October launched Signal, a product that uses machine learning to assign a risk score to Automated Clearing House payments. Since Signal’s launch, Plaid said it has tripled its monthly processing volume and protects more than $2 billion in transactions per month across banks, crypto exchanges and wealth platforms.
