Effectiveness of fraud interventions : Combining systemic and individual interventions

Abstract

This paper outlines a systemic approach to combating payment transaction fraud. Fraud is a significant societal problem that can be understood as a complex system. Interventions within such systems can be categorised as S-frame (system change) or I-frame (individual or behavioural change). The paper argues that both forms of intervention are necessary, supported by strong feedback loops between the two. Three case studies are presented. First, the S-frame intervention of daily payment limits is examined, with a focus on its impact on bank impersonation fraud. Secondly, the S-frame intervention of payee verification is discussed, including results from its early implementation in the Dutch market in 2017. Finally, I-frame interventions through targeted awareness campaigns are illustrated using the example of the ‘TikTok job scam’. The paper concludes with the following recommendations: (1) regulators should enable payment service providers (PSPs) to apply robust S-frame interventions; (2) PSPs should adopt a systemic perspective, integrating S-frame and I-frame approaches; and (3) system actors should be permitted to share data to strengthen and sustain feedback loops. This article is also included in the Business & Management Collection which can be accessed at http:// hstalks/business.