FSTC Completes Significant Fraud Collaboration Project

Project Team Produces Fraud Taxonomy Enabling Institutions to Work
in Partnership to Identify and Expose Fraudulent Activities
NEW YORK--(Business Wire)--
The Financial Technology Consortium (FSTC) today announced
completion of a significant project studying financial transaction
fraud across the entire financial services spectrum. This seven month
project resulted in the development of a fraud taxonomy model that can
become an important tool in promoting financial institution
collaboration in the war on fraud.

The importance of the project was summarized by Brian Kelly, Ernst
and Young executive and fraud expert on the twenty member FSTC team.
"Responding to threats posed by modern fraud requires unprecedented
levels of cooperation and coordination between lines of business,
industries, and government agencies. Fraud is growing and getting more
serious and sophisticated, providing increased motivation for sharing
information to mitigate the risks."

The Fraud Collaboration Project was launched in August of 2007
with goals of: (1) demonstrating the value of collaboration via a
shared fraud pattern data base and (2) identifying the infrastructure
needed to make use of such a data base on a collaborative basis,
practical for financial institutions. The complexity of the project
required the team to break into four work groups to complete the
massive array of tasks which needed to be performed to achieve the
project's goals:

-- The first work group researched the legal and regulatory
framework, identifying all regulations applying to this area
of financial services and flagging those considered most
critical. These regulations were summarized and specifics
around compliance and reporting and privacy implications were
documented.

-- Group two surveyed the industry to identify and catalog
current fraud prevention capabilities and similar existing
initiatives.

-- The third work group developed the taxonomy of financial fraud
schemes along with a comprehensive glossary of terms, creating
a model to be used as common ground to support interactive
collaboration within the industry.

-- Group four developed an initial concept of operations for
sharing of fraud data within the industry to detect, respond
and investigate fraud.

"With global fraud losses totaling trillions of dollars, our
desire is to bring financial services experts together with technology
innovators to simplify collaboration in a very complex environment,"
states FSTC Managing Executive Jim Pitts. "There is still a lot to be
accomplished in this integrated approach to fraud prevention."

The FSTC anticipates extension of the project into a second phase.
This next phase will focus on developing more detail around use of the
taxonomy, likely to include detailed mapping of prevention
technologies available today with the various schemes identified in
the initial taxonomy; defining scheme signatures down to the lowest
level; identification of cooperative loss reporting alternatives by
taxonomy; and how to share real-time information utilizing the
taxonomy.

About FSTC

FSTC brings together diverse, and often competitive financial
institutions, industry services providers, government agencies, and
others to collaborate and find solutions to key industry challenges.
Project topics come from member financial institutions and are driven
by participating members with the support of FSTC staff.

For more information on FSTC, the Fraud Collaboration Initiative,
or current and future FSTC projects, please contact JimPitts@fstc.org
or visit www.fstc.org.

Parallax LLC
Bill Dorfman, 781-235-3424
bdorfman@parallaxllc.com

Copyright Business Wire 2008