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 “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.
