HSBC Taps ValidiFi for Account Validation and Risk Detection

Banking giant HSBC turned to ValidiFi and its account validation and risk detection solutions.

These solutions will help improve the integrity of bank accounts used to pay credit card balances, according to a Monday (Oct. 27) news release. The partnership will employ ValidiFi’s data intelligence to validate account ownership, detect fraudulent payment attempts and identify suspicious behavioral patterns across bank accounts.

“The collaboration addresses a growing need for smarter tools to detect and deter threats such as synthetic identities, mule accounts and payment scams,” the release said. “ValidiFI’s comprehensive data network analyzes a wide range of behavioral and transactional data to flag anomalies before they impact customers.”

ValidiFi CEO John Gordon said in the release that HSBC’s decision to use his company’s platform “demonstrates a clear commitment to safeguarding customer transactions and staying ahead of increasingly complex payment schemes.”

Among the capabilities offered through the integration are account ownership verification, to ensure payments originate from legitimate sources, and pre-transaction risk detection, to spot high-risk activity ahead of transfers, according to the release.

“Providing customers with efficient and secure ways of making credit card payments is essential,” HSBC U.S. Head of Retail Product and Lending John Phelan said in the release. “Our innovation and transformation efforts in personal banking require advanced fraud services, such as those offered by ValidiFi, that protect our clients.”

The economic impacts of fraud have forced financial institutions to move resources away from innovation to deal with immediate threats, impeding progress within the industry.

Reaching a balance between innovation and security is critical. Consumer expectations are shifting, with research by PYMNTS Intelligence showing that 69% of customers prioritize fraud protection when choosing a financial institution.

“As digital banking becomes mainstream, so do security concerns,” PYMNTS wrote Sept. 24. “While 76% of consumers demand real-time service access, nearly half express skepticism regarding the security of artificial intelligence-enhanced banking technologies.”

The research also showed that 91% of consumers said protecting their personal information is important, spotlighting the fact that trust is as critical as technological innovation in retaining customers.