The Federal Reserve will study fraud and its financial impact on the U.S. payments system and determine its causes and factors contributing to it. The federal agency announced the study on Thursday (March 29) and that it’s part of an effort to improve and support payment security in the industry as noted in the Federal Reserve Next Steps in the Payment Improvement Journey paper released in 2017.
The Boston Consulting Group (BCG), a global management consultant, will complete the study over the next four to six months. The study will measure payment fraud and offer insight on payment security issues. The study also should help to inform how the Federal Reserve works with the industry and improve payment security.
“The vast number of participants and complex nature of the payments industry make it challenging to determine where the greatest opportunities exist for significantly mitigating fraud,” said Ken Montgomery, payments security strategy leader for the Federal Reserve and chief operating officer of the Federal Reserve Bank of Boston. “We hope to bring greater insight to the challenge with a comprehensive view of payment fraud data and payment security vulnerabilities that will help inform next steps for ongoing industry collaboration.”
BCG was selected in a competitive bidding process that looked at expertise, ability to complete an independent assessment and the how assessment would be completed.