Plaid Beacon, an advanced anti-fraud network developed by our partner Plaid, empowers fintechs and financial institutions to collaborate in the fight against fraud. Plaid has announced a significant enhancement: detailed insights into Plaid-linked accounts, powered by Plaid’s extensive network of over 500 million connected accounts. This new feature strengthens defenses against identity theft, synthetic accounts, and account takeovers (ATO).

Beacon’s effectiveness lies in its collaborative approach. Companies report instances of fraud, allowing others to instantly screen users against this shared database without disclosing personally identifiable information (PII). During the customer onboarding process, companies can verify details against Beacon to determine if the customer has been flagged as fraudulent elsewhere, thereby preventing fraud from spreading across the financial ecosystem.

“Increased data and signal sharing among financial institutions and digital finance companies is becoming essential to combat fraud,” stated Zilvinas Bareisis, Head of Retail Banking and Payments at Celent. “Anti-fraud networks like Plaid’s Beacon can be leveraged by any company within the ecosystem to share insights, enabling participants to better identify fraudulent patterns, address identity fraud and account takeover threats, and help limit losses for both consumers and businesses.”

These network insights are available early in the process—at the time of bank account linking—allowing companies to mitigate losses from onboarding and servicing potentially fraudulent accounts. To find out more about this solution, read more here or join the Fight Against Fraud Beacon is available to all fintechs and financial institutions interested in joining and contributing to the network. Learn more about Plaid’s efforts to combat fraud at Plaid Effects, their virtual customer conference on June 18.