Case Study
Confirmation of Payee (CoP) – Protecting customers against payment frauds
Learn how implementing confirmation of payee (CoP) helped a UK bank protect its customers against APP and misdirected payment frauds.
Challenge
A prominent UK bank was looking to combat fraud and enhance their customers’ banking experience. The bank was looking to implement Confirmation of Payee (CoP).
However, lacking the necessary in-house resources to undertake the project, the bank turned to external vendors to provide a fully managed service for both inbound and outbound CoP requests.
Given that the bank operates multiple legacy systems with no standardised naming conventions across accounts, it was crucial to find a vendor with a proven track record in complex name matching.
The primary objectives of the project were to reduce fraudulent transactions and ensure a seamless user experience by streamlining the payee validation process.
Currently, the bank handles an average of 485,000 inbound CoP requests and 410,000 outbound CoP requests per month.
solution
XBP offers Confirmation of Payee (CoP)
XBP’s extensive experience in offering name matching solutions to financial institutions throughout Global and its successful delivery of crucial components for critical payments infrastructure, such as the Image Clearing System for Vocalink, impressed the Bank. XBP adhered to the latest Pay.UK specification and Open Banking security requirements by providing an internet-facing web service. Leveraging its expertise gained from serving more than 400 financial institutions across Global, XBP launched a top-notch CoP service with great success.
XBP’s CoP service seamlessly manages both inbound and outbound requests for the Bank. When an inbound CoP request is received, XBP ‘s intelligent pre-processor performs a sequence of checks to ensure efficient and accurate results. These checks include:
- Checking the exception account database to exclude accounts with fraudulent activity or customer opt-outs from CoP checks.
- Utilising a global cache of hashed requests to respond efficiently to equivalent requests.
- Performing a fuzzy match between the payee account name and the actual name(s) stored against the account, using XBP’s proprietary AI to process Levenshtein distances and compare against all known valid nicknames or alternative spellings.
XBP’s name matching service is key to its success, with the system pre-processing and identifying critical components of names to ensure the best possible results. For outbound CoP requests, XBP’s routing module establishes a secure connection to the Payee’s bank’s API endpoint, managing the entire process of submitting the request and receiving the response.
Benefits
Benefits with XBP’s Confirmation of Payee (CoP)
The system provides protection against mis-keyed payments and APP fraud, with a complete audit trail and transparent reasoning from the AI detailing how the results were attained. Overall, XBP’s CoP service offers efficient and secure management of both inbound and outbound requests for the Bank.
- Offers high performance with a quick response time of less than 100ms
- Handles complex account names, including joint accounts and business accounts
- Provides end-to-end audit and reporting for transparent processing
- Decades of tuning have minimised false positives and false negatives
- Enables faster and more accurate processing
- Aims to combat the nearly £479 million lost to Authorised Push Payment fraud in the UK
- Reduces the risk of misdirected payments
- Provides assurance of the authenticity of the payee and payer accounts, enhancing reputation
- Implementation of CoP has resulted in a decrease in both the value and volume of scams.