BITS Comments on Basel Digital Fraud and Banking Discussion Paper

Dear Mr. Hernández de Cos:

The Bank Policy Institute [1], through its technology policy division BITS [2], appreciates the opportunity to respond to the discussion paper, “Digital Fraud and Banking: Supervisory and Financial Stability Implications,” issued by the Basel Committee on Banking Supervision.[3] We encourage the Committee to consider the recommendations in this response as it continues to update its discussion paper and assess the implications of fraud to the banking ecosystem.

Fraud management is an important priority for all participants in the global financial system, as well as a concern for the customers the financial system serves. The Bank Policy Institute has been working with banks for nearly three decades to address critical fraud challenges and facilitate efforts by industry and government stakeholders to combat fraud. Examples of BPI-led initiatives include developing customer education programs on fraud, identifying effective practices for detecting fraud, partnering to implement fraud intelligence sharing services and implementing strategies to mitigate check fraud, among many other actions.

In recent years, the financial system has experienced a rise in fraud attacks due to the increased availability of stolen access credentials, the proliferation of synthetic identities, a substantial increase in the sophistication of scams and social engineering and a surge in check fraud. At the same time, banks have expanded their digital banking services as customer preferences have evolved. Along with this growth, banks have invested significant resources in enhancing fraud controls and will continue to invest in protecting their customers as a key focus area.

To read the full comment letter, please click here, or click on the download button below.

[1] BPI is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. BPI’s members include universal banks, regional banks and major foreign banks doing business in the United States. Collectively, they employ almost two million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

[2] BITS – Business, Innovation, Technology, and Security – is BPI’s technology policy division that provides an executive-level forum to discuss and promote current and emerging technology, foster innovation, reduce fraud, and improve cybersecurity and risk management practices for the nation’s financial sector.

[3] Digital fraud and banking: supervisory and financial stability implications (