How Banks Can Comply With the New APP Fraud Reimbursement Mandate
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The Regulatory Shift
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Starting in 2025, the UK’s Payment Systems Regulator (PSR) will enforce new rules requiring banks to reimburse victims of APP fraud unless they can prove proactive prevention. Similar frameworks are emerging in the EU and Israel.

This changes everything. Reimbursement costs can destroy trust and profit margins, but more importantly, regulators now demand evidence of prevention efforts, not just investigation logs.
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What “Prevention” Really Means

Under the new standards, financial institutions must:

• Monitor and analyze behavioral signs of manipulation
• Educate customers proactively
• Deploy real-time intervention layers
• Collaborate across institutions to block mule accounts

These requirements go beyond compliance checklists - they demand behavior-aware systems capable of detecting scam influence while it’s happening.
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Vara Security’s Approach to Compliance
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Vara Security offers banks and payment providers a ready-to-integrate framework that fulfills regulatory expectations for live behavioral prevention:

• VVRI Scoring Engine: Evaluates user vulnerability and transaction risk.
• Vara Shield: Multi-layer AI system that introduces dynamic prompts, cooldowns, and step-ups based on behavioral risk.
• Audit & Reporting Tools: Provide traceable evidence of preventive action for regulators.
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Why Early Adoption Matters
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Institutions that move early not only reduce fraud losses but also gain a competitive advantage. Customers increasingly expect their banks to protect them emotionally and financially. Preventing a scam before it happens builds unmatched loyalty.
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Vara Security helps banks meet APP reimbursement standards with proactive, real-time scam detection powered by behavioral AI.