4 Global Fraud Payment Trends to Expect in 2020
Last year shaped up to be an intense one in the world of payments fraud, and 2020 is ramping up to be just as wild. Social engineering, identity fraud, behavioral biometrics and machine learning seem to be the top concerns for businesses in 2020.
As we move further into 2020, we looked at where the payments fraud industry is headed. The following are our top four predictions:
Unsupervised Machine Learning and Shared Intelligence
While supervised machine learning will continue to be the mainstay of fraud teams, unsupervised machine learning will start to gain a foothold and become a must-have for enterprise fraud protection. We will also see more interest among banks for shared intelligence (features and signals vs. data) for increased accuracy of fraud detection and prevention. The concept of a centralized payments intelligence hub could be a big trend in 2020, where information around fraudulent activity can be shared between organizations. For example, if one bank gets hit by a fraud pattern, other banks could learn from it and avoid falling into the same trap themselves. This creates a win-win situation between banks and their customers. Enterprisewide fraud management will become too narrow of an approach to risk management, which will help such a centralized intelligence hub to take shape.
User Behavior Analytics (UBA) for Continuous Risk Assessment
UBA will be used to gauge continuous risk or authentication assessment. With UBA, organizations can assess user behavior, whether it’s a swipe on the phone, a wiggle of the mouse or a tap on the keyboard. These features make it quicker and easier to detect unusual or suspicious behavior. BioCatch is an example of a company that's pioneering in this area.
Consumer Scams Continue
Consumers across the world are now the weakest link, as fraudsters continue to manipulate them into their scams — something that's sometimes referred to as “social engineering.” This will drive an ongoing rise in authorized push payments (APP) fraud in the United States and across other countries that offer immediate payments. There will also be an increase in scam victims’ conversion to “mules” as consumers realize they've been duped and banks refuse to reimburse losses.
Consumers must slow down, question, and conduct appropriate research when faced with situations involving payments of any kind, whether it be APP fraud or other types of immediate payments related to fraud. In fact, both businesses and consumers should consider talking to someone they trust — whether an accountant, family member, financial institution or even law enforcement — about finance and payments before taking actions. Moreover, the internet offers a trove of information on the different types of scams out there.
Across the world, identity scans are largely broken as governments and agencies have failed to create strong, trusted identity management solutions, meaning that synthetic IDs and pure identity theft will continue to increase this year, especially as banks and credit grantors continue to neglect reporting these losses or lose them in credit losses. We will see continued attacks on central infrastructures that manage digital address books for immediate payment accounts. Australian PayID attacks is one such example.
As we begin a new year, payment providers will need to protect consumers from themselves as they continue to willingly hand over their funds to scheming fraudsters. However, including UBA in fraud prevention and detection strategies will help businesses understand the risks. Furthermore, continuous risk assessments with richer data will be required to protect all parties involved in payments.
In conclusion, the digitization of the world economy and desire for real-time payments for improved customer experience are driving an unprecedented change in how we, and fraudsters, do business. Let’s make sure we stay in business, and they don’t.
Marc Trepanier is a principal fraud consultant for North America, ACI Worldwide, and Giselle Lindley is a principal fraud consultant for APAC, ACI Worldwide. ACI Worldwide is the Universal Payments (UP) company that powers electronic payments for more than 5,100 organizations around the world through a comprehensive suite of software and SaaS-based solutions.
Related story: It’s the Most Wonderful Time of the Year … for Hackers
Marc Trepanier is a principal fraud consultant for North America, ACI Worldwide, the Universal Payments (UP) company that powers electronic payments for more than 5,100 organizations around the world through a comprehensive suite of software and SaaS-based solutions.
With two decades of fraud risk management experience in banking and credit unions, Marc Trepanier’s career started with a focus on credit card fraud in a large financial institution developing fraud strategies to combat card fraud including counterfeit, account takeover, and e-commerce, but eventually moved to a wider role covering enterprise fraud including card, cheque, wire, online and mobile banking, first and third-party abuse and identity theft.
Giselle Lindley is a principal fraud consultant for APAC, ACI Worldwide, the Universal Payments (UP) company that powers electronic payments for more than 5,100 organizations around the world through a comprehensive suite of software and SaaS-based solutions.
Giselle Lindley's career in financial crime has spanned the public sector, banking and insurance, over a period of nearly two decades for several institutions in Australia. She has a postgraduate qualification in Criminal Intelligence, has held a board position with the Australian Institute of Professional Intelligence Officers, and has been a member of the Australasian Card Risk Council, APCA Fraud Committee and Fraud in Banking Forum.