Germany - Banking services - Digital euro - Risk and Fraud Management

The digital euro high-level product description foresees the establishment of a general fraud detection and prevention mechanism for online digital euro transactions as an essential component of the digital euro service platform (DESP). The general fraud detection and prevention mechanism is relevant in the context of digital euro transaction management. It must be established at the level of the digital euro scheme to support payment service providers (PSPs) in identifying fraudulent transactions by enriching the PSPs’ individual fraud risk view with insights on patterns and anomalies from a central infrastructure level perspective. However, PSPs of the digital euro environment will operate their own systems and apply appropriate fraud prevention, risk management and detection measurement rules. This procurement procedure aims at signing contracts with suitable providers for activities on the design and implementation of a central risk and fraud management component, providing a general fraud detection and prevention mechanism for online digital euro transactions. The component will cater for (non-exhaustive list of activities): the assessment the exposure to fraud risk of online digital euro transactions in real-time at the exclusive use of PSPs before the transaction is introduced into the digital euro settlement infrastructure; For this purpose, the component shall: receive and process a request from a PSP for real-time risk scoring of a transaction; send validation error message for fraud risk scoring requests in case the validation of data failed or time out occurred; upon a successful processing of a risk scoring request, respond with a positive notification; transmit the calculated risk score to the PSP requesting it; use the transaction details provided by the PSP and the rules set-up, to calculate a risk scoring of the transaction in real-time before the settlement. the support of payment service providers in detecting fraudulent transactions in online digital euro payment transactions that have been settled. For this purpose, the component shall: perform fraud analysis ex-post the transaction settlement based on a holistic picture of transactions across PSPs and produce fraud statistics. be capable of receiving and processing fraud statistics from PSPs. The statistics obtained shall be used in ex-post fraud analysis and to regularly produce situation awareness and intelligence reports for PSPs. support definition and management of rules to score the transactions. store fraud statistics (related to resulting risk scores and ex-post fraud analysis, for example) to support further fraud analysis as well as creation of reports (for the regulators and other stakeholders, for example). It should be emphasised that the general fraud detection and prevention mechanism offered by this component does not serve as a replacement for any deficiencies in PSPs’ fraud and risk management processes. It can only support and augment the activities at PSP level, by providing additional information that may otherwise not be available to PSPs to support their fraud prevention activities. This call for applications seeks the party responsible for the development, including maintenance, as well as the operation of the risk and fraud component for the digital euro based on the relevant contractual arrangements and on a decision of the ECB Governing Council.