Tackling fraud needs ecosystem-wide collaboration and regulation that supports innovation
Inclusive and innovative global payments platform, Ecommpay, has published the second part of its report on fraud within financial services and payments: Beyond the Black Box – From diagnosis to action: transforming fraud prevention for a human-first world. Where Part One, published in May, explored challenges within the modern fraud landscape, and how human psychology has become the primary attack vector, Part Two focuses on action government, the industry and individual stakeholders can take to make a meaningful difference.
“The first part of our Fraud Report demonstrated how and why the current approach to fraud prevention is failing businesses and customers,” commented Willem Wellinghoff, Chief Compliance Officer and UK Chair at Ecommpay. “Over the years, new tools and layers of friction have been added to onboarding and payment processes to tackle the shifting threat of fraud. However, this approach is no longer serving its purpose – more friction is not the answer. What we need is a fundamental shift in how the industry thinks, works and collaborates.”
According to the new Ecommpay report, with the fraud landscape fragmented and continually shifting, fraud has become a borderless crime able to target any business or customer. Dated technology is no longer the weak point in fraud prevention. Instead the weakness criminals choose to exploit is the intersection of human psychology, resource constraints and regulatory complexity.
Willem Wellinghoff continued: “Traditional fraud prevention tools and frameworks are not equipped to provide comprehensive protection against modern fraud techniques. Robust transaction monitoring, correctly employed AI and balanced regulation are all valuable elements in successful fraud prevention. But businesses, regulators and government must work collaboratively to consolidate approaches and reduce fraud.
“We must shift from a reactive approach of reimbursing victims after the fact, to proactive fraud prevention at source.”
The Ecommpay report includes key steps for e-commerce merchants to take to protect their business and their customers from fraud.
Key fraud protection steps for e-commerce merchants:
- Discuss fraud prevention with your payment provider
- Audit your own systems
- Educate your customers on the risk of fraud to they can protect themselves
- Train staff to recognise attempted fraud
- Stay up to date with the changing fraud landscape
- Monitor for unauthorised use of your brand and report fraudulent websites
- Report suspected fraudulent transactions to your PSPs
