Will ‘Faster Payments’ stumble without clear fraud risk planning?

Actimize Fraud Product Team, Fraud Detection & Prevention

NICE Actimize clients can join Mary Ann and other subject matter experts at ENGAGE Client Forum on October 25-26 in Brooklyn, NY. Topics of interest include a panel discussion titled “Instant Payments Emerge: Are Fraud Solutions Ready?” as well as “An Industry Perspective: Fraud & Cybercrime Management” presented by CEB TowerGroup analyst Jason Malo. For more information, visit www.niceactimize.com/engage.

As the epic saga of the evolution of the global payment speed continues, a great deal of discussion regarding its viability has emerged. This question of viability arises particularly in the United States where financial institutions and payments experts are working through the difficulties of enabling many types of faster payments services to consumers, businesses, and corporates.

Sadly, at the most senior levels of many organizations, fraud, cyber and authentication are subjects that often appear to be an afterthought, and more than often are greatly underestimated as necessary elements in a well-coordinated plan for the adoption of “faster payments”.

As if we need a reminder, here are five fast fraud facts of fraud and speed:

Fact One: Fraudsters will be attracted to speed from day one, and once a gap in controls is realized the fraudsters hit the system like a casino players with endless funds to gamble. Considering FIs are launching multiple types of faster payments, fraudsters find themselves with many opportunities as new services go live without appropriate controls in place first. Unfortunately, the fraudsters will use that “experience” to exploit across channels regardless of speed.

Fact Two: Any strategy and policy to protect faster payments needs to be part of a comprehensive plan and end-to-end program that is coordinated and unified with cyber, authentication and fraud teams working together. Remediation strategies for mission critical payments protection can be smarter with this approach since the dependencies are clear.

Fact Three: All levels of your organization, up to the board and CEO need to understand and be educated on the effort to protect and enable faster payments. This requires leadership from fraud teams who provide clear direction and vision to senior executives of the risks and exposures of faster payments scenarios. If this is not done up front, it will certainly happen later if an unsupported and clear fraud plan for faster payments fails and customers or new products are affected.

Fact Four: There is no “silver bullet” for faster payments — this is falsehood held at very senior executive ranks. No single form of authentication, or web application fire wall, or fraud policy will “do the trick”. Gartner’s “layers of security” breakdown still holds true today as ever in this faster payments environment. It’s crucial that FIs consider a strategic approach, which includes payment-level analytics for detection, intelligent cross-channel authentication, and a view of cyber threats on the payments system.

Fact Five: Faster fraud will affect all lines of business at financial institutions, including retail, corporate, commercial, private banking, and more so the planning to protect payments and your customer should receive corporate-level thinking and sharing of best practices across various divisions.

Last, what we cannot forget are the competitive advantages that faster payments bring to financial institutions. As a user of some of those banking products today, I’m spoiled and happy when I know my transaction is completed in such a timely manner! But even better, I am even happier when I know my institution is effectively protecting my transactions from the fraudsters.


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