Banks warn that implementation of fraud database could be delayed


The timeline for introducing an interbank database to protect against financial fraud will become “less predictable” if primary legislation is required, Irish banks have warned.

A common fraud database would allow banks to share real-time information on potential fraud cases with each other and with authorities to curb criminal activity, especially with increasing digitization and teleworking.

The Banking & Payments Federation Ireland (BPFI), which represents Ireland’s largest banks, wrote to the Department of Justice to argue that only secondary legislation was needed to implement the database.

Brian Hayes, chief executive of BPFI, said such a system was necessary “to protect against the rapidly increasing fraud that is being perpetrated against financial institutions and consumers in Ireland”.

According to the BPFI, the existing Data Protection Act 2018 forms the basis for the implementation of the common fraud database, which would require the processing of crime-related data.

The BPFI said it worked with the law firm Arthur Cox to draft a legal instrument that would allow the use of the database, which would be available to any financial institution regulated by the Central Authority Bank of Ireland.

The BPFI’s draft law would apply restrictions to the categories of personal data processed to ensure it is limited only to fraud, money laundering and other criminal investigations. The data would be stored within the EEA.

“The Department is considering, together with its legal advisers, a proposal submitted by the BPFI regarding a common fraud database. No decision has yet been made on the legal basis for such a database,” said a Justice Department spokesman.

A spokeswoman for BPFI said the organization is hoping for an update in April – and that the shared fraud database could be operational by 2023 if secondary legislation is deemed appropriate.

“When it is determined that primary legislation is required, the timeline for implementation becomes less predictable – due to the lengthy nature of this legislative process,” she said.

The common fraud database has been under development for some time and banks are demanding its implementation to help fight criminal activity.

A similar database has existed in the UK since 2006, run by the non-profit organization Cifas. Both AIB and Bank of Ireland are members through their UK businesses. Banks warn that implementation of fraud database could be delayed

Fry Electronics Team

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