With the launch of the New Payments Platform (NPP) looming, financial organisations across Australia are turning their attention to how they can harness the benefits of faster, safer, data-rich payment systems that make every day payments easier for business and individuals.
The changes in the Australian payments landscape, driven by the NPP and innovative technologies, are fundamentally changing the industry, but they also bring a new set of challenges. Technological advancements globally have impacted the way we live, make payments, and interact with each other as a society and the same technology that has helped change the world of payments is also driving the complexity of fraud, requiring an increasingly sophisticated anti-fraud response.
While the NPP is not inherently riskier than traditional payment methods, transactions will happen in real time and be non-repudiable. This makes transaction accounts a more attractive target to fraudsters. Therefore, financial services companies using these platforms need to have the capability to detect and respond to fraudulent activity in real-time.
A report in November 2016 from the Bank of International Settlements cautioned that real-time payments may be a more attractive target for fraud than traditional retail payments. Given these new industry challenges and opportunities, commitment to fraud detection and management is critical.
To help organisations meet the challenge head-on, Indue recently teamed with IBM to become the first service provider to go live with Safer Payments, a counter-fraud management system to protect its customers using the New Payments Platform (NPP).
Indue’s pioneering real-time fraud prevention solution, the first of its kind to be deployed in the Australia and New Zealand markets, combines the expertise, security and anti-fraud bureau capability of Indue’s Orion Financial Crimes centre of excellence with IBM Safer Payments cognitive fraud detection solution.
The focus of the team was to build a solution that would detect and prevent increasingly sophisticated fraudulent activity across all payment channels and to reduce customer losses because of this criminal activity. As part of Orion Financial Crimes bureau service, the solution delivers increased consumer confidence with their transactions, utilising real-time payment platforms such as the NPP and across other payment channels.
IBM’s Safer Payment solution, available through Indue’s Orion Financial Crimes, delivers services with unique cognitive capabilities and machine learning algorithms to increase accuracy and reduce false alarms to lower costs for participants of the service. It’s superior to a strategy focused purely on anti-fraud perimeter defence solutions which will have a role to play, however they do not protect in any way once the perimeter is breached.
The partnership with IBM has been one of real collaboration. Building out the financial crimes solution in parallel to delivering on the NPP has been a complex and rewarding journey for both organisations. Indue is proud to bring Safer Payments to the Australia and New Zealand markets, and to be able to offer organisations real-time, bureau-based NPP Fraud and Sanctions management capability. The Indue IBM partnership brings together leading innovators, to minimise customer payment fraud levels across all channels.
In closing, financial organisations need greater security and an enhanced experience for their banking customers. Providing a “next generation” approach, IBM Safer Payments utilises artificial intelligence to reflect decades of human experience and deep know-how in fighting fraud. Extensive behaviour profiling capabilities will allow Indue and its customers to stay ahead of the challenging, fast-changing fraud landscape. Integrating Orion Financial Crimes and IBM’s counter-fraud technology delivers a new paradigm in fighting fraud in the Australian market.