Beacon adds bank account insights to help companies strengthen fraud defense

Alain Meier
Head of Identity, Plaid

Alain spent his career building identity and anti-fraud products. Now he’s on a path to lower fraud at scale for the digital finance ecosystem.

Plaid Beacon, our anti-fraud network for fintechs and financial institutions, empowers collaboration to fight fraud. Today, we're excited to announce a major leap forward: insights into your Plaid-linked accounts, powered by Plaid’s network of more than 500 million connected accounts. This addition strengthens defenses against stolen identities, synthetic accounts, and account takeovers (ATO).

Beacon's strength lies in its collaborative network. Companies report fraud, allowing others to instantly screen users against this database, without revealing personally identifiable information (PII). When onboarding a new customer, a company can check their details against Beacon to see if they've been reported as fraudulent elsewhere. This can prevent fraud before it proliferates across the financial ecosystem.

“Increased data and signal sharing among financial institutions and digital finance companies is becoming essential to combat fraud,” said Zilvinas Bareisis, Head of Retail Banking and Payments at Celent. “Anti-fraud networks, such as Plaid’s Beacon, can be leveraged by any company in the ecosystem to share insights, enabling the participants to better identify fraudulent patterns, address identity fraud and account takeover threats, and help limit losses for consumers and businesses.”

Enhanced fraud detection with bank account insights

Plaid is now extending Beacon's capabilities by enabling companies to analyze their Plaid-linked accounts for fraud indicators. By leveraging the vast Plaid network, participants gain unique insights that can significantly improve their existing fraud prevention models.

Once a user links their account to a company via Plaid, Beacon can provide that company with 40+ insights about the linked account, including:

• Account age & status (closed/restricted)

• Number of connected apps via Plaid

• Account connection frequency and associated IPs

• Identity changes to the account

Customers can evaluate these insights to determine the likelihood of downstream fraud. 

For example, analysis for a neobank showed a 65x higher risk of unauthorized returns when three or more browsers linked the account to other Plaid apps within a week.

Since these types of network insights occur earlier in the funnel - at the time of bank account linking - customers can significantly reduce losses from onboarding and servicing accounts that could otherwise result in fraud.

"Beacon helps us safeguard our organization through important fraud insights from other companies and the Plaid network. Being a part of Beacon means we can improve our risk assessment models and address complex issues like compromised accounts," said Kristin Clark, Manager of Web Development, Veridian Credit Union.

New visual graph unveils hidden connections

Beacon also now includes a visual graph that helps companies identify less-obvious patterns between their users, including duplicate addresses, SSNs, IP addresses, or unique clusters of customer PII association. For example, this could identify shared PII across users, common IP addresses, and other associations that may indicate suspicious activity. Beacon helps you find these connections so you can investigate more deeply and make more informed fraud decisions.

Safeguarding millions through network effects

By sharing fraud intelligence, more than 20 participating companies are using Beacon to reduce fraud incidents and protect millions of consumers. Stolen identities and compromised accounts become less effective as they're flagged across multiple services. The number of scans by participants has risen more than 20% each month over the last year. The network's effectiveness grows exponentially as more companies participate and contribute.

Join the fight against fraud

Beacon is open to all fintechs and financial institutions that want to participate and contribute to the network. Learn more about how we're addressing fraud at Plaid Effects, our virtual customer conference on June 18.