This Month In Commercial Banking
The heightened speed of payments and higher transaction limits is an environment conducive to fraud, and the numbers confirm it. Providers face a difficult balancing act between convenience and security as they seek to protect their customers and themselves.
Besides doubling down on education, financial institutions are taking key steps to strengthen fraud controls within the digital user experience and digitizing standard processes of their fraud monitoring teams. These include enhancing beneficiary management, offering risk-assessment triggers driven by machine learning and enhancing rule-based processes to the payment workflow.
We’ve also seen an increase in the processes and steps that require token or PIN authentication, added pre-population of payments fields and, for certain high-value payment transactions, more rules-based security pop-up notifications. In addition, banks are expanding the use of beneficiary and payee verification controls to ensure that payments are directed as intended. These include confirming in real time that the payee name, account, and business address entered all match what’s on file.
Complicating fraud mitigation, which is already an ever-evolving challenge, are the many novel schemes that induce end users to instruct payments that, while technically authorized, end up being fraudulent. Digital platforms can play a key role in both automating detection and embedding workflow steps to prompt end-user caution. But they need to do so without disrupting the speed and efficiency that customers have come to expect.