Fraud & Blockchain – More Insights from Money 20/20

By: Dr. Debbie Bartoo, Senior Innovation Strategist

Money 20/20 provided its attendees with an abundance of insights and data that are central to the success of PSCU’s Owners and to the credit union industry. In this second Money 20/20 post, I wanted to share the key takeaways from two conference topics: Fraud and Blockchain.


The complexity and new features of services that consumers avail themselves of now will provide more potential for fraud in our digital channels. If we stop to consider the future, that fraud potential increases even further, especially as IoT devices rise in popularity.

So, what should the emphasis be now for the credit union industry? We should focus on having connected data to understand behavior patterns, and to better identify when data is out of pattern across the full spectrum of banking channels. Today, we need to know the device or channels that each member has used, and then use that history for the benefit of understanding behaviors and capturing fraud. This history is important to aid in providing richness to the information we have, and to recognize fraud. Most importantly, this helps us move toward the centralization of data so that we can understand nuances and behavior variation in all channels.

In today’s organizations, information is still too siloed and impenetrable, making it difficult to understand patterns and combat fraud. We can improve here recognizing the many vendors used for services, and the data that must be brought together to provide a holistic consumer view. The holistic view is needed before we can understand the anomalies.

The importance of consortium data was mentioned in the fraud component of Money 20/20 and is worth noting; this is the sharing of what organizations have seen in terms of fraud, and is used to help the industry combat threats as a whole. The takeaway: No one wins if we lose member trust.

Special emphasis was placed on the building of flexible systems, as fraud and solutions will evolve over time, and credit unions must be able to adapt –quickly – whether it is by adding vendors to support new threats, or adding more data. Different scenarios will require different solution designs, so frameworks must be built to be adaptable.

The relationships with local and federal law are critical, and the collaboration among the industry is important to build solid cases. Small cases may not warrant time or resources, but combined, they may be significant where it brings attention to the law.

We need to keep in mind, the fraudsters are using the same tools that we have available. They too are using artificial intelligence (AI) at likely, a faster pace than many organizations. AI can be used for both good and bad. Unfortunately, credit unions must always be prepared for the bad in order to retain member trust.


Blockchain was another hot topic of Money 20/20 that provided some interesting content. Guest speakers presented their success using blockchain for cross-border payments. Cross-border payments represent an area ripe for change due to the complexity for getting payments to their destination quickly and receiving a payment confirmation. Ripple touts themselves as a payment company that designed a blockchain solution for cross-border payments, creating efficiencies to get the payment to its destination faster and also providing a transaction confirmation. The way that cross-border transactions worked prior to the Ripple solution was through in many cases the creation of files that were batched to send on for processing. Blockchain has been a good solution for cross-border payments due in part to its ability to accommodate small volumes today. A standard API was created to be used with participants, and now pre-funding is no longer required to settle. The opportunity to add speed and confirmation to the transaction are benefits resulting in a better consumer experience and overall product. Ripple is seeing an increasing number of banks adopt this solution.

The future is viewed as positive for blockchain, in that blockchain offers up solutions to real-world problems.

In a subsequent event, a blockchain speaker reminded the audience that blockchain is a technology and a database, and that appropriate use cases will continue to be developed where it makes the most sense.

When walking away from Money 20/20 this year, it was with a good feeling that PSCU has the solutions that meet credit union member needs. And, more importantly, that credit unions trust us to ensure the security of their members’ data, optimize their experience, and deliver on innovations that will drive them successfully into the payments landscape of tomorrow.