ATLANTA — The Federal Reserve Bank of Atlanta and Georgia State University’s Evidence-Based Cybersecurity Research Group (EBCS) are forming a three-year partnership to address online payments-related financial fraud.
The EBCS will surveil the darknet and encrypted web channels to better understand how online payments-related criminal activity affect the payments landscape and promote safer, more efficient payment solutions and practices.
“We expect this partnership to have a huge impact on the safety of online banking as our research will help identify issues regarding online payments and fraud,” said David Maimon, director of EBCS. “It speaks volumes that the Federal Reserve has turned to the cutting-edge research we conduct in the Evidence-Based Cybersecurity Research Center to help guide policy regarding online fraud prevention and mitigation in the financial industry.”
Payment innovations, such as digital wallets, mobile payments, and person-to-person payment apps, offer convenience but also expose users to new types of fraud. Bad actors can steal identity components, like Social Security numbers, addresses, authentication credentials, and account details, and sell them through markets hosted on encrypted web channels. Their actions create far-reaching harm across the financial system and broader economy.
EBCS uses behavioral science and innovations like machine learning to research, document, and minimize cyber harm. Collaborating with Federal Reserve payments experts, EBCS researchers and Georgia State Ph.D. students will monitor online criminal markets for payments-related activity to document trends, identify new types of fraud, and support a better understanding of crimes surrounding new payment types.
The partnership will attempt to identify the impacts of the introduction of digital assets, such as central bank digital currencies on online criminal markets in other countries.
“This partnership with Georgia State University will help the Federal Reserve System and the entire payments industry understand fraud from a different perspective and lead to better solutions and operational practices around payments innovation,” said Cheryl Venable, chief of payments operations for Federal Reserve Financial Services. “The effort will capitalize on, as well as advance, the Atlanta Fed’s expertise as a payment network operator, supervisor, and researcher.”