Striking a balance between security and innovation is key

 

​As technology evolves and consumer patterns change, criminals could be changing their ways too. More payment transactions are taking place online without the payment card being physically present, and while the average fraudster would once have been a petty thief, the scale in online transactions could turn defrauding payment transactions into a valid criminal enterprise that might be passed as more profitable than drug trading or other illicit activities.

​Card not present fraud was on the agenda at Money20/20 Europe, as the panel discussed the changing patterns of card not present fraud.

"No doubt there's a risk when consumers accept to have their card numbers and data stored in a lot of different channels, which obviously makes them vulnerable to organised crime. But I think the SecuRe Pay regulations implemented in Europe last year strike the right balance between security and cardholder education, while at the same time making sure it's user-friendly," says Susanne Brønnum, Grop Executive Vice President, Financial & Network Services, Nets, and points to the many positive developments in the current Nordic marketplace within innovative educational mobile solutions while at the same time stressing the need to ensure that the online shopping environment is secure and PCI-certified.

"But it is difficult as a lot of new companies want to attract and establish themselves by launching less secure, perhaps, but more user-friendly methods – it's an industry paradox right now."

Susanne Brønnum is backed by Catherine Moore, MD and President, JP Morgan, who notes how millennials are changing the way payments are performed:

"Young people are getting more tech-savvy, just wanting that one-touch experience to a point where it becomes unclear whose responsibility it is – yours, the consumers'? Everybody is posting everything, constantly online to share, agreeing to terms with a click – you haven't even read the terms, you have no idea what you're putting out, and we're sort of expected, the regulators of the technology, the business at the transaction level, to be the nanny of the money, when they're really the parent of the money."

 

Scale matters in fraud prevention

 

"I think that when it comes to fraud and security, a lot of communities want to be working together, and fraud forums have been established in different regions," says Susanne Brønnum, underlining that with more transparency on both the acquiring and the issuing side, the more feedback they will have from the merchants and consumers.

Monica Eaton-Cardone, CIO and Co-Founder of Global Risk Technologies, agrees, suggesting that technology allows access to additional data that could be grabbed from fraud patterns:

"I think we need to recognise we are not islands when it comes to fraud, and that at the end of the day all of us are affected."

As fraud is becoming increasingly specialised and organised, and in constant mutation, tracking and preventing it requires substantial resources: "This is an area where scale really works for us. The more scale, the more data you can collect from a number of clients, the smarter the systems and the more fraud the networks get to prevent," explains Susanne Brønnum.  

 

 Guilty as charged

 

Asking if fraud will ever be solved is like asking if we are ever going to solve theft, as Catherine Moore points out. It moves around, and there have always been cyber issues, although not to the extent seen in recent years. Nets engages with the Danish government on data protection with the aim of educating consumers on how not to give away personal data online. With more than 200 banks as customers in the Nordics and gathering a lot of data on fraud and its prevention, the company is working on being a specialist in the fraud area.

"It's a constant battle and not something you ever finish, especially nowadays as fraud is moving into some sort of cyber war. It is organised crime with a lot of robotics roaming the entire internet with the intent on hacking and doing fraudulent transactions. So we need to step up and make sure we have the right specialists and the right school and systems in place. Striking the right balance between innovation and security is key," concludes Susanne Brønnum.  


 

The panel

 

'Innovations in card not present fraud' was discussed at Money20/20 Europe by a panel consisting of Monica Eaton-Cardone, Global Risk Technologies, Catherine Moore, JP Morgan Commerce Solutions, Nicolas Raffin, Oberthur Technologies and Susanne Brønnum Nets. The panel debate was moderated by Andrew Jamieson, Head of Innovations, UL.