With the ease of online payments and rise in real-time payment platforms, frauds related to the same are also on the rise for the majority of banks. Analytics firm FICO recently conducted a survey on the same topic in Silicon Valley which concludes that the 78 percent of the banks have seen increase in fraud-related losses.
Further, the report adds that almost 22 percent of them believe that the fraud will rise significantly in the next 12 months while additional 58 percent of them says that they expect a moderate rise in fraud.
Commenting on this, Dan McConaghy, president of FICO in Asia Pacific said: “AI can’t slow down the clock, but it can help create systems that are radically quicker to recognize a transaction that smells likely to be fraudulent. Banks will need to move beyond passwords and OTPs and add biometrics, device telemetry and customer behavior analytics to keep up with the changing payments landscape.”
Majority of APAC banks, around 84 percent, have a strategy of multifactor authentication and use a wide range of authentication methods including: biometrics (64 percent), normal passwords (62 percent) and behavioral authentication (38 percent).
Interestingly, nearly half of them (about 46 percent) are currently only using one or two of these strategies, potentially leaving them more exposed to attack vectors such as identity theft, account takeovers, cyberattacks.
In this, about 40 percent banks named social engineering as the number one fraud concern for the real-time payments, followed by account takeovers as well as false accounts and money mules.
As for mitigating this criminal behavior, more than 90 percent of APAC banks surveyed thought that convergence between their fraud and compliance functions would be helpful in defending transactions on real-time payments platforms.
Frauds and scams related to online real-time payment is also a major concern in the Indian market. In order to curb this, one of India’s leading online payments platform Paytm has filed case against 3,500 mobile numbers as it looks to prevent phishing.