Finance
Unlocking the power of AP Automation to tackle payment fraud in an economic downturn
Published
4 months agoon
By
admin
Daniel Ball, SVP Innovation at Medius
Fraudulent activity in the workplace is not stopping any time soon. According to a recent study by UK Finance, workplace criminals have stolen a whopping £609.8 million in the first half of 2022 alone, through authorised and unauthorised fraud and scams. The height of the pandemic resulted in the creation of decentralised, work security systems through remote working conditions, providing the very climate for fraudsters to infiltrate payment processes, exploit private data and ultimately syphon-off funds.
Furthermore, as businesses in the UK struggle with soaring inflation and the cost-of-living crisis, businesses are now operating in a post-pandemic, cash-saving mode, bringing issues of effective cash flow management and supply chain efficiency to the fore.
Whilst businesses will take a great many steps to alleviate financial pressures in the aftermath of a global health crisis – and a current global financial crisis, many finance professionals are missing a cost-saving opportunity right under their noses – payments fraud. We know payments fraud is a huge drain on businesses. The latest Financial Census(https://www.medius.com/financial-census/) surveyed 2,750 global finance executives, including 501 finance executives in the UK – and discovered that UK businesses lose on average over £290,000 each year to invoice fraud.
Shockingly, 1 in 5 finance professionals are unaware or unable to even estimate the cost of invoice fraud to their business, which is particularly concerning in an economic downturn. Additionally, many finance departments struggle to source where the fraud-risk areas are within their businesses.
AP Automation is a game-changer when it comes to cost-cutting and creating a channel of visibility when it comes to invoices, spend and cash flow – all of which is necessary in the current economic climate. So what can businesses do to tackle this burgeoning issue head on? Here are three tips to help Finance and IT teams identify and reduce workplace fraud.
1. Validate important supplier data
In a fast-paced workplace with multiple moving parts, it’s very easy to neglect the details. However, overlooking the small print provides the perfect conditions fraudsters need to syphon company funds into their back pockets. To mitigate or prevent this, Finance and IT departments can vet their suppliers using technology.
This starts at the very beginning: from supplier initiation, verifying all contact information – including supplier tax identification numbers – all as part of the supplier onboarding process. But it doesn’t end there. Businesses must continue to pay attention to the details through ongoing data analysis – via AP Automation – into business models. This is crucial to spotting anomaly or unauthorised payments and unusual transaction timings.
2. Create a system of checks and regulations
Creating a robust security system will significantly benefit businesses in the long run. Human error is real and stressed and stretched employees are more likely to let fraud slip through their fingers. Additionally, limited resources and high talent churn, particularly in a post-Covid, pre-recession world means that companies can’t realistically monitor every aspect of payment transactions. Automation is a lifeline here. Reducing the administrative burden on employees and adding an extra layer of security, which automatically flags new and unfamiliar payments – all in real time.
3. Use anomaly detection technology
Keeping a step ahead of fraudsters is a game-changer. Whether fraudsters are from inside or outside a business, technology can help catch fraud and build a robust system which can differentiate between legitimate and illegitimate payments – identifying duplicate transactions, and unusual payment patterns. Automated anomaly detection systems can also be tailored to recognize verified transactions and who authorises payments. This helps finance and IT teams instantly spot red flags and identify potentially fraudulent activity.
While fraudulent activity is by no means a new threat for business, it is likely to steadily grow over the next two years as the UK heads into a recession. Fraudsters will be able to take advantage of changing economic headwinds and seek new opportunities for fraud as businesses face increased daily pressures, ranging from spiralling and ever-changing costs for resources, to supply-chains in flux, and staff who are struggling to cope with rising demands from businesses.
This will put pressure on businesses to constantly re-evaluate their system of checks and balances at the same time as implementing cost-cutting strategies, to stamp out fraud and prevent the huge financial toll this has. For businesses to not only survive, but thrive during these uncertain times, they must fine-tune their back office processes, strengthening their entire operation through increased transparency, and the effective management of cash flows aided by technology.
Finance
In-Store, Online & In-App – Unifying Payment Authentication
Published
1 day agoon
March 23, 2023By
admin
Michel Roig, President of Payment and Access, Fingerprints
Often, new technologies are lauded as the death of existing ones. This has been undoubtedly true in some areas. Think audio cassettes and CDs, Betamax and VHS, fax machines and email… and a host of other examples. Sometimes the market and product vendors can influence this decision but, mostly, consumers decide which technologies win based on the value they bring to their everyday lives.
Often though, new technologies coexist with, and complement, existing ones. This is very much the case in the payments ecosystem. The advent of mobile payments had many claiming the death of the humble payment card. In a world still using cheques and with significant innovation happening across both mobile and card payments, the card is not going anywhere for the foreseeable future because consumers choose different payment methods based on different situations and preferences.
But, as new payment methods are made available to consumers, and each keeps evolving, the payments ecosystem needs to ensure that the security, convenience and user experience is consistent. This blog will trace the adoption of card and mobile payments, discuss the need for strong authentication and highlight the role biometrics is playing in enabling unified experiences for consumers.
Card & mobile payment adoption
There is still a mix of how consumers make in-store payments today. For example, Fingerprints research found that more than 70% of consumers elect to use their cards most often, compared to less than 5% choosing their smartphones.
But mobile contactless is growing. Mobile payment experience enabling the same (or better!) convenience of traditional card payments, with additional security and more opportunities for richer experienced and value added services like loyalty and discount integration. Because of this, for example, last year the U.S. saw in-store grow by 29%.
Additionally, we can consider in-app and online mobile payments. Allied Market Research reports the global in-app purchasing market size was valued at $76.43 billion in 2019 and is projected to reach $340.76 billion by 2027, growing at a CAGR (compound annual growth rate) of 19.8% from 2020 to 2027.
Safety first, right?
It’s clear that contactless transactions are growing, but safety is still a concern for a lot of consumers, particularly with cards.
Consumers around the world have come to love the convenience of contactless. While 77% of consumers use contactless regularly, half are worried about the lack of security if their card is lost or stolen and around a quarter are confused about spending limits.
And even as contactless use was rocketing, fraud was a cause for concern. According to UK Finance’s latest Annual Fraud Report, lost and stolen card fraud incidents increased by 1% between 2020-21, despite this being a time when normal high-street shopping habits were drastically altered due to pandemic restrictions. Worryingly, the same report highlighted that when pandemic restrictions were eased in late 2021, contactless fraud on payment cards and devices went up 20%.
Historically, the authentication methods for card, mobile and online payments have been diverse and inconsistent. Biometrics is helping to unify, strengthen and simplify the payment authentication process, no matter where or how consumers choose to pay.
Biometrics bringing benefits
One innovation helping consumers – that increasingly demand more convenient, secure and hygienic payment experiences – is the addition of biometrics to strengthen and unify authentication.
After over a decade of integrations, mobile is the most mature and established market for consumer biometrics, and we now estimate that more than 80% of smartphones sold now incorporate some form of biometric sensor.
Recently Fingerprints celebrated that its own sensors have been integrated in more than 650 mobile device models globally, in nine out of the top ten smartphone OEM brands. But this is by no means a static market.
Crucially, continued adoption is being driven by innovation. Ongoing R&D on the biometric sensors and software are enabling biometrics to support broader product development and innovative use cases. This is supporting ongoing mobile adoption and diversification into other devices like payment cards.
Ongoing momentum is down to biometrics’ fundamental benefits; the technology’s ability to strengthen security and authentication while maintaining or even improving the user experience by removing the need to enter PINs and passwords.
Unifying the authentication UX
On top of these core benefits, biometrics can also help banks and card manufacturers to harmonize the payment authentication experience. Consumers are already used to unlocking their smartphone with a fingerprint sensor. With mobile payments and banking apps on the rise, biometric authentication is now increasingly common in consumer finance. By offering biometric technology in payments cards, banks can offer their customers the same convenience and security they are used to from their mobile and in-app transactions.
Not all consumers pay for items in the same way, so the important factor is to offer trusted options that help a wide range of users. The addition of more secure authentication to cards is therefore a logical development in order to cater to the requirements of the less tech-savvy individuals all the way through to the digital natives.
Evolution not revolution
So, it is not a question of new payment technologies replacing existing ones. Technology evolves, yes. But cards are not static and, for many, will continue to be the default method of payment. For others card, mobile contactless, online, in-app and others all have a time and a place.
Moving forward, banks and other issuers can support customers by adding strong authentication to the ‘tap’ of contactless to bring it in line with mobile and in-app payments. Alongside added protection reducing fraud risks and lost revenue, it provides the convenience of avoiding contactless limits – and the confusion they can bring – altogether.
With the clear need for security that does not compromise convenience, the desire among consumers for the technology, and the readiness of the technology for mass rollout, the coming years look exciting for biometrics and its role in smarter payment experiences.

By Eric Megret-Dorne, Head of Card Issuance Services and Service Operations at Giesecke + Devrient
Digital banking has become increasingly ingrained in people’s everyday lives. Today, 73% of people globally use online banking at least once a month. Traditional bricks-and-mortar banks, which have long relied on the in-person experience with customers, are now having to step up their offering. With new ways of working blurring the work-home boundary, banks must ensure a fast, seamless connection between face-to-face processes and virtual customer experiences.
However, this does not mean that physical and digital banking are in competition with each other. In fact, many continue to use physical bank cards, with 1.12 billion in circulation in 2021, which provides the basis for digital payments and offerings. As a result, the benefits of digitalisation should converge with the comfort of physical touchpoints to create a holistic, “phygital” experience.
The path to phygital
Banks are accelerating their digital transformation strategies to keep up with the fast pace of fintech innovations. To meet the changing needs and preferences of customers, the payment world is leveraging new technologies to create personalised experiences through a range of different channels.
While the digitalisation of banking has been underway for quite some time – particularly for younger generations – events such as the Covid-19 crisis forced banks and customers of all ages to use digital tools and processes to compensate for branch, office, and call centre closures. With branches worldwide typically operating at reduced capacity due to social distancing requirements, consumers embraced online banking to avoid both the virus and potentially long queues.
However, some consumers still enjoy physical touchpoints, meaning a digital-only approach won’t suit everyone.
Striking a balance
It’s all about options – consumers now want to freely switch between traditional and digital channels without being forced into one. But how can banks achieve this phygital balance? One way is to equip physical channels with digital capabilities, so that online tools can augment the physical experience. For example, personalised bank cards with a bespoke design can be activated digitally, offering customers an extra layer of convenience. Having to wait for a new PIN to arrive in the mail is a common bugbear for consumers, so bringing card activation processes into the digital ecosystem will ensure a more seamless experience.
Greater automation in the card issuance and activation process enables the benefits of digital to be integrated into the physical banking experience without being intrusive. For instance, self-service kiosks empower customers to print their own cards, reducing the time between acquisition and card issuance, while still allowing for in-branch expertise if needed.
The personal touch
Phygital strategies also give banks a range of valuable data insights that can help them better serve their customers. This includes data on purchasing behaviours and habits, which can then be utilised to improve banks’ offerings and unify the physical and digital brand experience. Using omnichannel data helps to build a hyperpersonalisation strategy to provide real-time services.
In this way, digital solutions help banks maximise their user experience. Whenever a consumer interact with a bank, it creates data and behaviours. With fragmented databases, legacy systems and real-time data created by interactions with third-party partners through Application Programming Interfaces (APIs), it is not always easy for banks to streamline this data from different sources. By understanding patterns in that data and behaviours, banks can tailor and personalise unique experiences for each and every user.
Where security meets innovation
With big data opportunities abound, banks should be mindful of their consumers’ security concerns. Customers are now demanding much more transparency when it comes to how information is stored and collected. At the same time, they still desire greater personalisation via digital methods. Therefore, any successful phygital strategy requires a robust digital security to ensure customers have the same peace of mind as when they complete physical transactions.
To close the gap between innovation and security, banks should utilise tokenised infrastructure, which ensures the safe provision of payment credentials and securing of customer payments across all touchpoints. This is particularly important as regulations such as PSD2 and SCA demand strong authentication requirements.
The use of a token greatly enhances the consumer experience. For example, it allows for card details to be automatically updated for subscription services upon the expiry of an existing one, avoiding any service disruption. Multi-factor authentication can also ensure an additional layer of security, as it combines a password with verifiable human biometrics such as fingerprints or facial recognition.
Best of both worlds
Every consumer has unique preferences when it comes to banking. Therefore, banks must evolve by bringing both physical and virtual touchpoints into a ‘phygital’ world. Only a phygital approach can meet the needs of all end users – whether they favour an in-person experience, an online one, or a blend of the two. The holistic data insights, personalisation opportunities, and optimised security ensured at every touchpoint are also critical in building future-ready banks.
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