As Covid-19 continues to encourage most of us to work from home, in the financial world webinars have become somewhat commonplace. This month, card issuing giant Mastercard hosted its first ever virtual conference for the APAC region, focusing on financial fraud during Covid-19. Evie Rusman discusses the conference’s key themes
Covid-19 has not only resulted in the acceleration of digital payment methods, but it has also caused e-commerce levels to sky rocket. In addition, fraudsters are becoming more innovative – more and more new methods of fraud are being developed to support new and emerging technologies.
As a result, fraudsters have a more sophisticated tool-kit to work with, which can make cyberattacks more dangerous. Adding to this, according to figures from Juniper Research, e-commerce merchant losses to online payment fraud is expected to reach $25bn in 2024, up from $17bn in 2020.
So, how do we stop this from happening? The key theme at this year’s Mastercard Cyber & Risk Summit was to look at how businesses can get ahead of this trend in cybercriminal activity. In his opening speech, Michael Miebach, President of Mastercard, discusses how trust is a key factor in getting ahead. He also reiterates the importance of digital tools in protecting businesses from cyber fraud.
“As we all know cyber risks accelerate at times of vulnerability,” he says. “No-one is spared – governments, banks businesses, merchants and consumers are all targets. But everyone wants to feel safe to protect their money, data and privacy at all times. They need to trust that the partner they are working with has their back, and that is the one constant between what we are dealing with today and what we will deal with in the best of times.”
Why has the industry become more vulnerable to cyberattacks? Speaking during his session, Johan Gerber, EVP Cyber & Security Products at Mastercard, explains how the payments ecosystem has changed over the years, and therefore caused new opportunities for fraudsters.
“I think we are going to see a few lasting changes – most of them for the better,” he says. “If you look at how our ecosystem has changed over the years, we started with a pretty simple four party model. In those days, things were pretty easy and well defined – we understood fraud pretty well.
“I would say pre-2012 the top discussion in most conferences and most meetings with customers was related to counterfeit fraud skimming. Then we started seeing this expansion into the digital world and how the ecosystem got a little bit more complex as third parties got involved. These parties help to get content online and move businesses online. However, this has opened up a new area of fraud and opportunities for criminals.”
Mastercard tips to fighting financial fraud
Mastercard advises that businesses take these five key steps to combat financial fraud:
- Evaluating the potential impact to your organisation. Mastercard argues that to benefit from smarter decisioning throughout the consumer journey, it is imperative to first understand your current state. For instance, Mastercard advises businesses begin by mapping out vulnerabilities and forecasting expected losses to help identify how to contribute to the organisation’s revenue targets.
- Getting organisational buy-in. Fraud and user experience have often been dealt with by different departments within an organisation. But as the consumer journey grows more complex, multifaceted, and multi-device-based, the points of interaction have grown, as have the opportunities to optimise performance. Mastercard encourages organisations to consider their tech stack and who is needed to implement the solutions. After this, they should ensure alignment with leadership and break down any “insight silos” that may get in the way of collaboration. The heads of technology, digital experience/innovation, fraud, data should share information with each other for a coordinated effort to stop fraud and enhance the customer experience.
- Defining the ideal security layers, tools and insights. Mastercard argues that for a fully connected approach to succeed, the intelligence gained from each security/fraud prevention layer should inform the subsequent tools along the path, thereby connecting insights for a more confident approval decision.
- Designing workflows, authoring rules and determining challenges. Once businesses have identified the right tools, they should think about increasing the risk/reward ratio at each security layer. Every new connection and every new API increases an organisation’s potential points of vulnerability. By designing a system to meet a business’ needs means having the right rules and workflows in place to make the most of the security tools that business has.
- Infusing intelligence into the equation. Through leveraging technologies such as machine learning and AI, businesses can adapt to new and evolving threats from the time a user enters the online environment. This means organisations can be further protected from constantly evolving vulnerabilities, resulting in greater accuracy over time, while providing the consumer a seamless journey.