Fear can be a powerful motivator, especially where payments fraud is concerned.

While financial institutions have a healthy fear of high-profile fraud vectors like business email compromise and authorized push payments fraud, they may not have developed it around a new source of concern: instant account funding fraud. And with the Consumer Financial Protection Bureau (CFPB) essentially mandating consumer financial data portability in its final Rule 1033 issued Tuesday (Oct. 22) account opening is very much in the news, and for good reason.

Technology has raised expectations for speed, and consumers and businesses expect to open an account — especially a FinTech account — within five minutes, whether it’s through ACH, check or cards. The problem is that fraudsters can get the money out of the account as fast as it goes in. The five-minute rule goes both ways. If consumers are going to be more comfortable moving between accounts and more incentivized to open new ones, account opening fraud has moved from the periphery to front and center.

“I would say a vast majority of fraud occurs instantly,” Soups Ranjan, CEO of fraud detection and defense platform Sardine, told Karen Webster in an interview. “The money settles instantly, and a fraudster can withdraw it instantly as well. The same value prop that faster payment methods have for a consumer to fund their account instantly is actually a great value prop for fraudsters as well.”

Working Together to Fight Fraud

Ingo Payments has formed a new partnership with Sardine to combine data sources and technology to detect and fight against account opening funding fraud. But before you understand the partnership and its methodology, it’s important to understand how account opening funding fraud works and why it should inspire a healthy fear factor.

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