Fintech Fraud Prevention: How Treasury Prime Partner Alloy Helps Clients Cut Fraud in Half

Treasury Prime partners with global identity decisioning platform Alloy to offer the company’s best-practice journeys for both commercial and consumer identity verification. Together Alloy and Treasury Prime share more than 10 sponsor banks and more than 14 fintech companies as mutual partners and clients.

What makes the Alloy KYC and KYB platform so popular with Treasury Prime clients is the company’s seamless API integration with more than 175 data sources. Alloy’s fraud prevention API platform offers unparalleled visibility and control, all within a modern interface. The company’s solutions have helped its hundreds of fintech and bank partners across the globe cut instances of fraud by 48 percent on average. 

We spoke with Alloy Senior Director of Channel Partnerships Diane Heilman to learn more about the evolving threat of fraud and what fintechs and banks can do to stay two steps ahead of bad actors. 

Fintech fraud prevention

Key takeaways:

• Synthetic fraud is expected to increase.
• Fintechs must be vigilant about fraud prevention
• Outsourcing key compliance processes like KYC or “know your customer” checks to third-party partners like Alloy can help bridge the resource gap.
• Integrating with Alloy via Treasury Prime increases speed to market. 

Fraud in 2023: What banks and fintechs need to know

Fraudsters have more tools and resources at their disposal than ever before. Alloy’s recent State of Fraud Benchmark Report found that 91 percent of organizations have seen increases in fraud in the past year. 

“Digital banking means tremendous convenience for customers, but also new vulnerabilities ripe for exploitation from bad actors,” said Heilman. “At the same time, fraudsters have billions of dollars in cash that they wouldn’t otherwise have due to successful Paycheck Protection Program (PPP) fraud schemes during the pandemic.” 

She said Alloy expects to see increases in “synthetic fraud,” which is when a fraudster combines someone’s real identity information with fictional details to create a new identity. 

“A fraudster might store stolen personal information for up to three to five years before deploying it, which means information stolen as part of PPP fraud in 2020 might start showing up very soon,” she said.

Fraud prevention shouldn’t break the bank

Fraud can result in costly losses to your company and regulatory fines. The best way to fight fintech fraud is to stop it from happening in the first place. That means ensuring your end users are who they say they are, and that they are using your platform for legitimate purposes. 

Yet while financial institutions need to be vigilant about compliance and fraud detection and prevention, they must also be mindful of their resources. Alloy’s State of Fraud report found that two-thirds of companies have more than half their workforce working on anti-fraud fintech tools. 

“That takes time away from building your product, which hurts customers. Companies need more sustainable solutions long-term,” said Heilman. 

Outsourcing key account opening and compliance processes like KYC or “know your customer” checks to strong third-party partners can help bridge the gap between needs and resources. 

Fintechs should look for KYC and anti-money laundering (AML) providers that offer robust data and user-friendly interfaces for ease and quality of integration. 

How Alloy approaches compliance

Alloy takes a holistic approach to compliance checks so their clients can efficiently meet their legal obligations using Alloy’s expansive data tools.

“Rather than simply helping companies complete a KYC check, Alloy allows companies to bring together both internal and external data sources to do KYC, AML, and other compliance checks, while also helping companies combat fraud,” said Heilman.

Companies can access and control all data from within a single dashboard. The dashboard’s codeless interface also allows companies to add or change sources of data and tweak workflows without having to enlist help from engineers. 

“Our comprehensive approach allows for higher automatic approval rates and a decrease in fraudulent accounts, false positives, manual reviews, and unnecessary document requests,” said Heilman. “The information captured during onboarding, when combined with ongoing transaction and account activity, helps companies meet compliance obligations while also providing an evolving view of customers’ risks and needs.”

According to Alloy’s report, “The most common reason organizations cited for not being prepared for fraud was a greater need for automation.”

What companies say about working with Alloy

Clients of Alloy praise the platform’s agility and ability to deliver tailored results. Because clients can customize which data sources they use, and how they integrate different data, they can hone in on metrics that are most relevant for the risk profile of their user base. That enables companies to adapt to fraud risks without closing growth funnels. 

“We wanted a solution that was flexible, easy to use, pre-baked with integrations, and made adding new data sources and making changes to our policy simple and seamless. Using Alloy’s Identity Decisioning Platform provided us with the tools to create more complex configurations to deliver better and more tailored results,” said David Anderson, CPO and Co-founder of custom cards platform Tandym.

Accessing Alloy through embedded banking software platform Treasury Prime multiplies the identity decisioning platform’s benefits by ensuring even more seamless communication and integration with companies’ partner banks. 

“Managing fraud is critical to our mission of building financial tools for a more transparent economy. Working with Alloy and Treasury Prime has allowed us to onboard more genuine customers without increasing our fraud risk, and to coordinate seamlessly with our partner bank in the process,” said Brendan Tobin, Co-Founder & COO of sustainable finance app Purpose.

Why integrate with Alloy via Treasury Prime’s embedded banking software platform?

In a word: Speed. When you integrate with Alloy through Treasury Prime’s embedded banking platform, you can streamline your compliance process, communicate more easily with all parties, and get to market faster. 

“Far and away the biggest benefit of integrating with Alloy via Treasury Prime is the speed of integration. We've worked with Treasury Prime and the embedded banking software company’s extensive bank network to solidify best practices for onboarding and ongoing monitoring of risk management and fraud prevention. With Treasury Prime having a pre-existing integration, we can help fintech companies go live with Alloy very quickly,” said Alloy’s Heilman.

Treasury Prime’s anti-fraud fintech partners

In addition to Alloy, Treasury Prime works with partners Cable and Unit21 to provide specialized compliance solutions that help companies stay on top of fintech regulation. 

• Cable: Cable provides an innovative all-in-one financial crime effectiveness testing platform. Companies can leverage Cable to ensure compliance with financial crime requirements as part of a fintech fraud prevention strategy. 
• Unit21: RegTech platform Unit21 is a no-code platform that enables neobanks, fintechs and their partner banks to monitor suspicious behavior. Fintechs can customize rule sets and models provided by Unit 21 to detect and address suspicious activity, while the bank retains transaction monitoring responsibilities.

Related fraud in fintech content:

Creating a Culture of Compliance Within Your Company

Why Every Fintech Needs its Own Dedicated FBO Account

To Avoid Hitting a Regulatory Wall, Don’t Offload Compliance to a BaaS Provider

Treasury Prime integrates with a growing network of more than a dozen banks and also offers a long list of partners in areas ranging from compliance to card issuance and beyond. To learn more about Treasury Prime’s partners and how we can offer customized solutions for your needs, contact our team.