How Can We Stop Fraud Using PSD2 Data?

Today, fraudsters move faster than credit models can update. That is why real time data has become essential. At Kreditz, we believe fraud prevention must start with insight, not after the damage is done, but before it happens. This belief is what led us to build Kreditz Fraud Detect, a next generation solution powered by PSD2 and Open Banking data.

Why Traditional Fraud Checks Fail

Credit reports, tax data, and static credit bureau models still play a role. But on their own, they often miss the real story behind an applicant. In a recent Dagens Industri article, our co-founder Magnus Källhager put it plainly: credit reports help to an extent, but they cannot reveal everything. Payday loans, car leasing, and other fast moving financial behaviours often sit outside the traditional view.

What lenders are left with is a picture that looks clean on paper but hides risk in real life. These legacy systems were never built to detect things like synthetic income from fake employers, loan stacking across multiple lenders, or applicants who look reliable on old data but have already shifted into distress behaviour. Fraud has evolved. The way we detect it has to evolve too.

PSD2 Changes the Game

PSD2 allows regulated companies like Kreditz to access real time bank transaction data, with the user’s explicit consent. That one shift changes everything. Instead of relying mainly on historical snapshots, lenders can see what is happening right now in a person’s financial reality.

Real time PSD2 data makes it possible to verify income as it arrives, not just whether someone had income at some point in the past. It also reveals behavioural signals that fraudsters struggle to fake. Distress spending, recurring overdrafts, unusual transfers, or patterns that do not align with declared employment become visible immediately. In practice, PSD2 data works like a financial fingerprint. It is rich, behavioural, hard to manipulate, and constantly updated.

Introducing Kreditz Fraud Detect

Fraud Detect turns that real time fingerprint into proactive protection. It is built to stop fraud attempts before they impact lenders or brokers, not after a loss has already occurred.

Each application is assessed through predictive fraud scoring, trained on behavioural patterns from real fraud cases. When the system sees risk signals, it raises automated red flags for behaviours such as inconsistent income timing, sudden overdraft trends, or suspicious account activity right before an application. These are exactly the kinds of tactics professional fraudsters rely on.

Fraud Detect also focuses on one of the most damaging outcomes lenders face: first payment defaults. We identify applications that are likely to default immediately, which is a common fraud strategy used to extract funds quickly and disappear. And because Fraud Detect is built on Open Banking data, it provides wider behavioural visibility than legacy systems ever could. Where traditional tools see a slice, Fraud Detect sees patterns across the broader lending reality.

As Magnus Källhager explains, this is the difference between reacting and preventing. When you stop the fraud attempt early, you protect the lender, the broker, and ultimately the consumer.

What We Are Seeing in the Market

Across Europe, fraud has shifted in both volume and style. In Sweden, loan fraud is now outpacing credit card fraud. It is silent, fast, and difficult to trace once it succeeds. Fraudsters exploit fully digital applications, forged employment claims, bogus income certificates, and sophisticated social engineering.

We are also seeing that even strong national registries are not enough on their own. Countries such as Norway and Finland have discovered that credit registries cannot catch fraud when the reported income can still be manipulated, or when lenders cannot interpret behaviour in real time. Without live transaction insight, important signals are missed.

Fraud Detect in Action: Reducero

One collaboration that shows the impact clearly is our work with Reducero, one of Sweden’s leading loan brokers. With Fraud Detect in place, Reducero has been able to spot applicants with polished but deceptive profiles, reduce exposure to first payment defaults, and increase decision confidence for more complex borderline cases.

This is what modern fraud prevention looks like. Real time, automated, explainable, and designed to protect both business outcomes and consumer fairness.

Why This Matters Right Now

The regulatory direction is clear. PSD3 and the EU Financial Data Access Regulation are coming. Expectations on fraud prevention will only increase, especially around transparency and the use of consent based real time data. Soon, lenders will need to prove not only that they prevent fraud, but that they do so responsibly, in a way that is explainable and aligned with consumer rights.

At Kreditz, we believe Open Banking data is the secret weapon for fixing a flawed system. Fraud Detect is already doing that today.

Want to stop fraud before it starts?
Get in touch and we will show you how Fraud Detect can protect your business.