How to protect your digital payments systems
The key is in designing a solution that uses data to stop fraudulent activities. This involves four steps:
1. Use a cloud platform. Using a cloud platform to enable robust data ingestion and enrich data from multiple sources would provide a broader spectrum of real-time data, enabling faster analysis, real-time fraud detection, and more accurate fraud decisions.
2. Examine the entire customer lifecycle. Gather centralized data intelligence holistically and in real time at each customer touchpoint, from application transactions to account updates and from device data to behavioral data. This will help quickly identify evolving fraud patterns.
3. Use intelligent authentication. Depend less on passwords and use secure, frictionless methods for intelligent customer verification and authentication. Modern-day fraud verification and authentication incorporate advanced digital technologies, such as artificial intelligence, machine learning, and biometrics (fingerprint, facial, and voice recognition) as well as dynamic data for customer verification and authentication.
4. Preserve the customer experience. Customers can quickly switch to other digital payment providers if they experience slow transactions or feel that their current process is too complicated. Building a seamless fraud-detection process that is invisible to customers requires optimal prioritization between growth (for example, approval rate) and fraud rate.
The struggle against fraud has no end. But providers that harness data and use advanced digital technologies to develop a deeper understanding of their customers will have an advantage in keeping fraudsters out, ensuring that digital payment continues to be a favorite of consumers and providers alike.
This article was authored by Brian Baral, global head of financial crime risk management, and Joseph Gillespie, global practice leader of financial crime risk management. A version of it first appeared in ACAMS Today.