17 February 2025

Why should you implement the EBA Fraud Taxonomy?

Shape up your fraud data for better analytics, reporting and information

Part II. Click to read part I

With its uniform pan-European vocabulary and fraud categorisation approach, the EBA Fraud Taxonomy puts fraud experts on the same page. By leveraging the taxonomy, payment service providers (PSPs) can ensure that data is not just comparable across institutions, but also granular and actionable.  And this is an essential step towards introducing effective fraud intelligence and data sharing solutions. When they are on the same page, PSPs can join forces across Europe and worldwide on combatting fraud and drive the development of new collective and individual fraud-fighting strategies.

Now that we have set the bigger picture, let’s have a look at some of the advantages the EBA Fraud Taxonomy offers on the operating side. Thanks to its collective and practitioner-driven development, the EBA Fraud Taxonomy:

• Leverages established terminology. The taxonomy builds on the work done by fraud experts around the globe by relying on definitions from authoritative and publicly available sources, wherever possible.
• Applies to A2A and card payments. The taxonomy applies to both A2A and card payment fraud, breaking down the siloes that currently exist in classifying and considering these fraud types.
• Is aligned with PSD2 Fraud Reporting Guidelines. The definitions for initiator of the fraudulent payment transaction within the taxonomy are aligned with the European Banking Authority Guidelines on Fraud Reporting under PSD2.
• Separates fraudsters’ contact methods (‘how’) from applied tricks (‘what’). The taxonomy provides PSPs with separate data points regarding (1) the point of contact between fraudster and victim and (2) the action taken by the fraudster, enabling them to collect better and more granular data. This also helps to prevent future fraud attacks, e.g. via more targeted customer education campaigns.
• Has been developed by fraud experts. The taxonomy has been created and evolved by more than 30 fraud experts from 15 European countries.
• Benefits from an annual review process. Updates to the taxonomy are based on an annual change process to ensure it is future proofed against evolving fraud trends and upcoming regulations. Any interested party can submit change requests proposing amendments to the taxonomy (see below how to participate in the review and update process).

 

The EBA Fraud Taxonomy supports PSPs in their fight against fraud at many different levels. In short, it enables:

• easier and faster data point collection
• accelerated transaction tracking and advanced model training
• better fraud analytics, prevention and detection
• identifying, sharing and comparing fraud trends and data
• improved internal and external fraud reporting
• optimised fraud response (customer support, investigation, case handling)
• effective customer and employee education

European regulators are currently preparing the ground for fraud intelligence and data sharing solutions. With upcoming reviews to the Payment Services Directive and the new Payment Services Regulation, the EBA Fraud Taxonomy will be a crucial step in the introduction of those solutions and go from a “nice to have” to a “must have”.

A free copy of the EBA Fraud Taxonomy can be requested via the EBA website. 

 

Get involved: the annual change cycle appliable to the EBA Fraud Taxonomy is going on now

The EBA Fraud Taxonomy evolves over time so that it continues to support the fight against payment fraud in a fast-changing environment. It is subject to an annual review and updating process that provides any interested party with an opportunity to engage. 

In October 2024, the EBA launched the change cycle 2024/2025 with a call for change requests. The following deadline is next: 

• 2 April 2025: deadline to submit change requests pertaining to the ‘labels/tags’ section

To learn more about the details of the review and updating process and to download the change request form to propose amendments to the EBA Fraud Taxonomy, please refer to the EBA website.

 

The EBA Fraud Taxonomy in a nutshell: download the management summary

For key information on the EBA Fraud Taxonomy and why it matters to PSPs, we make available these management summaries: 

• One-page version: EBA Fraud Taxonomy management summary – provides a brief introduction to the taxonomy, explains the reasons for implementing it and highlights principal use cases 

• Two-page version: EBA Fraud Taxonomy management summary – offers the content of the one-page version (see above) and describes, in addition, key benefits of the taxonomy and how it works in practice