3 key takeaways from "Securing the future: Fraud prevention, privacy, and innovation in payments"

Collaboration  is key when tackling big challenges like fraud in payments. That's why we  recently teamed up with RMIT University and Deakin University to cohost the  CRC-P industry workshop, ˜Securing the future: Fraud prevention, privacy, and  innovation in  payments."

Bringing together experts from industry and academia, the event sparked valuable  discussions on how businesses can protect themselves and their customers from  financial  crime.

The  event featured thought leaders like anti-financial crime expert Luke Raven, cyber security psychology specialist Professor Monica Whitty, AI and  cybersecurity authority Professor Christopher Leckie, Bank Australia's Kevin Joseph, and payments veteran Tony McGrath.

This workshop is part of a larger cooperative research centre project, focused on  developing a digital platform to make crypto transactions more secure and  scalable ensuring trust in everyday business  operations.

Here  are three key lessons every business can apply to stay ahead in payments  security.

Fraud vs  friction: Protecting customers without sacrificing their  experience

Providing  a payments experience that is secure and user friendly has become a difficult  balancing act for financial institutions. Luke compared this to the trolley  moral dilemma - do you sacrifice one person to save five?

Adding e-payment friction through the use of multi-factor authentication or even blocking suspicious transactions is often necessary to save customers from the financial and psychological impacts of fraud. It can  also save merchants from chargebacks, as Tony McGrath pointed out, saying,  if you get a chargeback as a merchant, there's only a one in five chance  that you're ever going to win that money  back.

However,  if we add too much friction we can slow down payments, which slows down  business. We risk harming small businesses, and making Australia less  attractive for  investment.

Not  all businesses need the same level of friction. It's important to understand  your business and your customers and determine how much fraud and how much  friction you're willing to  accept.

Businesses  should also seek ways to identify low and high risk customers and offer  different levels of friction to suit the  situation.

Psychology and  technology experts need to work  together

In many businesses,  fraud prevention has been the responsibility of technical teams to solve,  however they can't solve these issues on their own. There is a psychological  element involved in fraud and scams, after all, scams have been around long  before technology existed.

Professor  Monica Whitty spoke passionately about her research in the psychology of cybersecurity and scams, one of her key recommendations was that we need to  work together with the psychology and the technology because you have to  understand the human and how that technology  works.

Psychology also plays a key role in helping the general public to protect themselves from fraud. Traditional forms of education and awareness often fall short. As fraud and scams prey on actions we make automatically through our heuristics rather than carefully considered decisions, we need to focus on changing  behaviours.

We need to prepare  for generative AI driven  fraud

Fraud is becoming harder and harder to spot, unless you're face to face with someone in the same room, can you really be sure of who you're talking to?

Professor Christopher Leckie is at the forefront of research into AI driven fraud. He  posed a daunting, yet interesting question to the audience what happens when  the bad guys start using AI to automate their attacks?

Those who stop and think before they pay, may check trusted sources of truth such  as a website or a customer service phone number to verify if a bill or other  request for money is credible. But what happens when AI fraud reaches these  trusted sources of  truth?

Generative  AI now gives fraudsters the ability to use bots and deepfakes, automatically  generating text, video, images and audio. Generative AI also helps these  communications appear more genuine, scraping information to make more personalised messages and responses that appear more  credible.

Businesses  need to consider the impact this could have on their customer service channels. These bots could flood customer service channels, becoming the new  type of denial of service attack. Or they could try to gain sensitive  information. Another point to consider is how do we train our customer  service representatives and frontline staff? And what feedback can we provide  to the customer service representative in real  time?

Summary

The CRC-P workshops and research projects are close to our hearts at  Novatti. We're committed to developing relationships, performing research and  sharing information between academia and industry.

Fraud  and scam prevention is a continuous process and we're committed to developing  solutions that protect both customers and  businesses.

If you would like to  discuss secure forms of payment for your business, please complete the form below and we'll be in touch shortly.