Connect with us

Business

2023 predictions: authentication, digital identity and in-car payments

Published

on

Lionel Grosclaude, CEO, Fime

As the number of devices and connected services rise, our lives are becoming increasingly digitized. Keeping up with this evolving landscape is vital, and 2023 promises to bring with it a host of new use cases and innovations. New technologies are coming to market that provide a greatly enhanced user experience that does not compromise on security. Innovative solutions such as SoftPOS are challenging traditional payment methods, while account to account payments have the potential to shake up the entire payments ecosystem.

In this blog, we explore some of the key trends in the ecosystem that look set to have a major impact on the way we live in 2023. From the changing nature of authentication to paying with your car, the ever-digitizing world will continue to transform our lives.

Streamlining authentication to address increasing fraud

One major trend from 2022 is the continued evolution of the fraud industry. Gone are the days of simple fraud management strategies; an entire ecosystem exists in its own right exclusively for buying, selling and exploiting sensitive data. Instances of fraud have increased by 20% over the past year, highlighting the clear danger the ecosystem is facing.

Lionel Grosclaude

To combat this trend, new authentication frameworks can provide a balance between strong security and seamless acceptance. A combination of active and passive authentication can ensure that the payments flow is secure while limiting the impact on the customer experience.

Biometric authentication is leading the way here. Utilizing biometrics, especially for multi-factor authentication, can expediate and strengthen the authentication process. Keystroke dynamics is a good example: a behavioral biometric modality that analyzes how a user types their password into their keyboard. This can be deployed as a multi-factor authenticator as it combines the knowledge of a password with the manner of typing, eliminating the need for an extra step of authentication. While removing all passwords is something that we may see in the future, this is not expected anytime soon. Therefore, it makes sense to harness the data available to increase security and reduce friction without changing consumer habits.

Delegated Authentication

Authentication processes are also being enhanced by delegating power to merchants. Lowering authentication friction is key to a seamless user experience. Therefore, merchants across Europe are investing in advanced authentication capabilities to allow them to process SCA-compliant transactions without purchasers being redirected to a banking app or having to enter a one-time passcode. This is allowing them to help reduce fraud and improve authorization rates, all while retaining ownership and control of their checkout experience.

Furthermore, major global payment schemes are introducing new regulations that will see banks recognize the authentication work done on the merchant side. This regulation also prevents banks from doing additional strong authentication if the certified merchant has already done it. This means that merchants are able to leverage industry authentication standards like FIDO Alliance to create their own checkout journey to reduce the friction between the customer and merchant services. This helps combat both fraud and cart abandonment, helping to deliver higher sales conversion rates and a better return on investment.

Digital Identity Infrastructures

Another trend to monitor in 2023 is the need for a robust digital identity infrastructure. Around the world, systems are being put into place to create seamless online platforms for storing and managing large amounts of personal data. These will facilitate the next generation of smart solutions across countless use cases. The Aadhaar solution is already in place in India, creating a nationwide database of biometric and demographic data. Meanwhile, the European Commission’s digital ID initiative is on course to be available to 80% of people in the EU by 2030. These advances emphasize the need for state-of-the-art authentication and data protection solutions.

The emergence of in-car payments

Connected cars have been an emerging use case over the course of 2022. Vehicles that offer real time traffic alerts and vehicle diagnostics, and can even stream high resolution videos, are becoming more and more common. In this age of automotive connectivity, car brands now have an opportunity to enhance their offering for drivers and merchant partners: in-car payments.

Integrating everyday commerce into the vehicle itself through in-car wallets will allow users to pay for fuel, parking, electric vehicle charging, drive-thru meals, or anything else from the comfort of their driver’s seat. Juniper Research predicts that the annual value of in car payments will reach $86bn by 2025And with delegated authentication now mandatory for in-car payments, transactions are secure while delivering an enhanced user experience. Leveraging this trend gives automakers an opportunity to build new revenue streams through partnerships and subscription services with merchants.

Navigating this changing landscape

Keeping up with all these trends presents a considerable challenge to stakeholders. The knowledge and investment needed to create secure, reliable and innovative solutions can be hard to find and costly to bring in-house. By working with a trusted partner, clients can create and launch trusted solutions by making use of its cutting-edge consulting and testing services. Fime works strategically to help its clients turn ideas into reality, swiftly take products to market, and achieve competitive advantage. Working together, Fime turns powerful innovations into the future of trusted transactions.

Business

Shutting off mule accounts to effectively tackle APP fraud

Published

on

By

Cleber Martins, Head of Fraud Management for Banking at ACI Worldwide

 

Authorised Push Payment (APP) fraud is on the rise. Losses from this type of fraud are expected to record an average CAGR of 21% from 2021-26 in the UK, US and India. To combat this rising threat, late last year the Payment Systems Regulator (PSR) published new rules for banks and building societies regarding the reporting of APP fraud.

While losses won’t keep pace with the overall growth of real-time payments, banks shouldn’t be complacent regarding the risks. And though it’s true real-time payment channels have created a reality where fraudsters can succeed faster, it is mule accounts that allow them to keep getting away with it.

Fraudsters recruit mule accounts often through identity theft, turning a user’s account into a mule account without their knowledge, or by recruiting and targeting more vulnerable people on social media and other online communication channels. Thereby enabling criminals to hide their identity and quickly move stolen funds beyond the reach of banks and authorities, either through other mule accounts at different banks, or by buying crypto or NFTs. This is why, in order to effectively tackle APP fraud, banks need to shut off these mule accounts once and for all.

Banks battling back

Currently, most banks only tend to check outgoing transactions. This means that when a mule account suddenly receives money from numerous different accounts, following little to no activity, it’s usually not picked up. And this needs to change.

Cleber Martins

When battling back on scams, banks need to have the appropriate Know Your Customer (KYC) standards. Thus allowing them to monitor the money coming in as well as out of customers’ accounts and analyse the user behaviour of those accounts. This all helps banks to monitor for synthetic and stolen identities in relation to the money coming into accounts.

Being able to monitor and analyse all the data in real-time requires machine learning algorithms with rich contextual information. Put simply, these models are only as good as the signals and inputs they have been given. This means the more financial institutions – on both the sending and receiving end of the transaction – collaborate on signal sharing, the better they can target mule accounts. Additionally, more data and more accuracy should also lead to a decrease in the number of false positives and an improved user experience for legitimate customers.

To effectively shut off the supply of mule accounts, better collaboration and data sharing between banks and financial institutions are needed and with the introduction of the new PSR rules, we could see this quickly come to life.

Why receiving banks must be held accountable

There’s currently almost no risk at all for receiving fraudulent transactions into mule accounts, despite hosting the mule accounts used by fraudsters to receive stolen funds. This results in most banks doing little to no monitoring or analysis of the money coming into accounts. And little to no meaningful intelligence being exchanged between the two ends of a transaction. To turn the tide on scammers, this needs to change.

The Payment Systems Regulator (PSR) has said that in addition to putting mandatory reimbursement for most victims of APP scams, liability should be split equally between initiating and receiving banks. Unless the receiving bank can prove it has gone to greater lengths to do it’s checks, in comparison to the initiating bank, resulting in the initiating bank being held more financially liable.

This should incentivise a major shift in how banks monitor fraud activity, by increasing how they monitor the money coming in, in combination with behavioural profiling of the receiving accounts. Ideally, once the two sides of a transaction are working together, a “fraud DNA” can be constructed to enable more precise decision making. One strand of that DNA, in practice, would be the initiating end’s sending an intent for a real-time payment, including intelligence about the initiating account in metadata format. The receiving end would then correlate that with their own, thereby adding the second strand of intelligence to the DNA chain. Finally, a decision would be made as to whether to allow the transaction to be completed.

This increase in collaboration between banks, would symbolise the first step of building a framework that promotes the sharing of insights and could mean the end of mule accounts as reliable tools for fraudsters.

What future collaboration might look like

While banks play an important role, mule accounts are often created on social media, through the telecom industry, via email or even postal mail. Making APP fraud a cross-industry problem. This requires a next-level, cross-industry collaboration strategy, that sees solutions, techniques and intelligence being shared between banks and vendors, merchants, issuers and acquirers, and even with social media companies and telcos.

Ultimately, it’s about ensuring customers are better educated and protected and that banks perfect their monitoring of the money that comes in, as well as out, all while sharing that information. Building a true cross-industry framework will help deprive scammers of access to one of their main conditions for growth. As a result, we should begin to see the value of APP scam losses, as a proportion of the value of real-time transactions, drop.

Continue Reading

Business

Want to increase positive customer purchasing experiences? Let’s talk IVR

Published

on

By

Andy Watts, Senior Account Director, Financial Services, at Odigo

 

For many years, debit and credit cards have reigned supreme, with the latest figures showing that in just the month of August, there were 2.47 billion debit and credit card transactions. While this is unlikely to change any time soon, the way we pay has.

The popularity of paying ‘in person’, using chip and pin, has reduced significantly while paying online has skyrocketed. Nevertheless, during the highs and lows of this journey, making payments over the phone – using interactive voice response (IVR) – has remained.

When it comes to credit, debit and digital payments, the lack of physical cash can sometimes add an abstract layer to the purchasing experience. Resulting in some customers lowering their guard when it comes to financial fraud and risk, and the same goes for Interactive Voice Response (IVR) payments.

To combat this, businesses need to actively ensure their contact centres are internally remaining compliant with security standards when it comes to the data flowing around the contact centre, as well as tackling the external lack of IVR awareness among their customers.

Andy Watts

Fighting fraud from the inside

During the pandemic, the fear of fraud and breaching data security increased, as contact centre agents were required to work remotely. It’s fair to say, remnants of that fear still remain given the increase in spoofing scams, other types of fraud and hacks.

However, hope is far from lost. Different elements of these risks can be mitigated through the Payment Card Industry Data Security Standard (PCI-DSS). This global technological and operational standard aims to drive the adoption of data security standards for safer payments, including IVR payments. Providers that commit to the standard need to get involved in the protection of their customer’s data while it’s in storage, processing and transmission. As well as also regularly testing and monitoring their networks and maintaining a vulnerability management program.

Unsurprisingly, customers want to be assured of accurate, safe transactions and that organisations will follow through on their commitments to goods or services. Contact centres need to continue to adhere to operational standards to ensure compliance and security, and ensure they ramp up education and awareness around the risks of IVR payments. All in an effort to reassure their customers and enable them to have the smoothest and safest customer experience.

Ensuring education from the outside

The contact centre is the epicentre of personal customer data. Contact centre agents regularly pull up and use insights from the data accumulated to amplify customer understanding and add to new data points based on continuous customer interactions. To ensure a continuously high-quality customer purchasing experience, when using IVR payments, an awareness of the importance of data security – by both agent and customer – is crucial.

IVR payments are almost always fully automated for 24/7 self-service and are expertly tailored to suit the customer and business needs. In reality, this translates into customers slowly being guided through a process of intuitive phone menus and additional information to ease any fears of fraud and other anxieties they may have.

Information about the process of IVR payments, how to spot fraud attempts and how to best secure data must be readily available for customers. If this is not already being provided by contact centres, then businesses need to re-evaluate their processes, sooner rather than later. Agents should be actively educating customers and information should be readily available via FAQs pages and chatbot functions.

While IVR payments remain a popular payment method for customers, contact centres need to ensure they are internally operating to the highest security and compliance standard possible. By securing their data in transit and storage whilst simultaneously ensuring ease for agents to utilise the data to continue providing meaningful CX. All of which can reduce customer anxieties around potential fraud and increase awareness around the risks of IVR payments, while delivering high quality and seamless customer purchasing experience.

Continue Reading

Magazine

Trending

Business16 mins ago

Shutting off mule accounts to effectively tackle APP fraud

Cleber Martins, Head of Fraud Management for Banking at ACI Worldwide   Authorised Push Payment (APP) fraud is on the...

Business21 mins ago

Want to increase positive customer purchasing experiences? Let’s talk IVR

Andy Watts, Senior Account Director, Financial Services, at Odigo   For many years, debit and credit cards have reigned supreme,...

Finance37 mins ago

Demonstrating fintech resilience in 2023

Melba Montague, Head of Financial Services, Genpact    Despite ongoing economic turmoil and a slowdown in investment, the UK has...

Banking2 days ago

E-commerce marketplaces have become more than third-party platforms

By Luke Trayfoot, CRO, MANGOPAY   E-commerce marketplaces have become an essential driver of e-commerce growth. As found by Ascential...

News5 days ago

With big tech firms making massive redundancies, could we see a tech bubble burst in 2023?

Rhys Merett, Senior Account Director at PHA Group   Following the pandemic, the return from lockdown triggered an influx of...

Finance5 days ago

How can merchants overcome barriers to payment innovation in 2023

Kevin O’Connell, Chief Product Officer at Trust Payments   The payments sector is going through an exciting change. Consumer expectations...

Banking5 days ago

Banking Technologies To Thrive In The Modern World

By Frank Arellano, Founder and CEO of Revolv3.   According to research by Digital Banking Report 2022, 36% of financial...

Business7 days ago

The trends to expect in the future of work in 2023 through the lens of a CFO

By Eliran Glazer, CFO at monday.com   Not a week goes by without significant evolution in the world of work....

Business1 week ago

How ecommerce businesses can retain customer loyalty during a recession

By Olusegun Akande, founder of Samis & S&T Enterprises As the UK’s recession worsens and consumers continue to feel the pinch caused...

Business1 week ago

Top 5 benefits of low-code development in financial services

By Richard Higginbotham, Product Manager at Netcall   Amid the rise of challenger banks like Monzo and Resolut, traditional financial...

Business1 week ago

The top predictions for the year ahead  

David Rosa, General Manager of Wallets, Disburse and FX at Rapyd   Despite the current global economic landscape, the year...

Finance1 week ago

OUTSMART THE TAXMAN BY MAKING THE MOST OF TAX SEASON

By Rita Cool, certified financial planner at Alexforbes The start of the new year brings ‘tax season’ upon us –...

Business1 week ago

Why using Rules-Based technology should not be dismissed

Dr. Ben Larwood, Chief Architect at Facctum   Over recent years AI has grown hugely in popularity and is seen...

Business1 week ago

Data is the key to unlocking investment for emerging markets

By Devin de Vries, CEO, WhereIsMyTransport   Over the past few years, the rapid economic growth experienced by emerging markets...

Banking1 week ago

Digital banking: A necessity, an option or a risk?

By Jonny Williams, partner, and Emma Radmore, legal director, at law firm Womble Bond Dickinson   Banks are at the...

Business1 week ago

The Role of Software Development in Shaping the FinTech Industry in 2023 and Beyond

Paul Blowers, Commercial Director at Future Processing   As another year passes, now is the time for company leaders to...

Business2 weeks ago

How FS organisations can utilise data to boost customer experience

Charles Southwood, Regional VP and GM – Northern Europe and Africa at Denodo We’ve all heard the age-old adage “the customer...

Business2 weeks ago

The Evolution of SoftPoS in 2023

By Brad Hyett, CEO of phos Contactless payments and digital wallets have surged in popularity in recent years. Part of...

Banking2 weeks ago

The Importance of Digital Trust in Banking and Finance

By Maeson Maherry, COO at Ascertia   With the rising adoption of eSignatures and the acceleration of digital transformation, trust...

Business2 weeks ago

Taking Financial Services to the Edge

Authored by Pascal Holt, Director of Marketing, Iceotope   Edge computing, cloud, and AI are changing the competitive landscape for...

Trending