Insights Thought Leadership

Complying with the Federal Reserve's Move Toward New Fraud Reporting

Complying with Federal Reserve Fraud Reporting


Fraud, Predictive Analytics, Automation

The Federal Reserve recently announced a new FraudClassifier™ model designed to improve the consistency of fraud classification and create a consistent taxonomy, leading to effective quantification of fraud losses. The purpose of the model is to classify fraud independent of payment type, payment channel, and other payment characteristics. It implements a decision graph beginning with who initiated the payment to differentiate payments initiated by authorized versus unauthorized parties.

The result is a holistic view of fraudulent events, allowing for better management in the following areas:

  • Helping financial institutions standardize classification and make better fraud management decisions.
  • Enabling allocation of appropriate resources for various fraud characteristics.
  • Providing consolidated reporting to the Federal Reserve for the creation of a macro view of industry fraud trends.

The new model has a multi-year roll-out plan determined by the Federal Reserve. ARGO’s fraud solution, OASIS™ (Optimized Assessment of Suspicious Items), will support the implementation of the FraudClassifier model by:

  • Pre-populating information and using decision trees to enable easy classification.
  • Providing enhanced reporting to institution management.
  • Enabling fine tuning of machine learning decision engines to solve optimization problems based on this new classification.
  • Automating reporting to the Federal Reserve.

ARGO OASIS customers get two classes of benefits: hard measured monetary, and customer relationship. OASIS provides value by more accurately detecting and preventing more fraud through multiple channels, at multiple points in time and contact with customers, through a single platform. More intelligent detection and machine decision-making allows for streamlined and accurate reporting, and improved strategic decisions by financial institutions with respect to the direction they take their fight against increasingly challenging fraud perpetrators.

For more information, download the “Changing the Game in Fraud Preventioninterview with David Engebos, President and COO of ARGO.


Download ARGO's interview with David Engebos