How fintechs can combat increased fraud with new safety measures (VB Live)
Presented by Yodlee | Envestnet
To combat fraud, Nacha has launched new account validation requirements and with it comes new opportunities Join this VB Live event to learn how to leverage fraud safety into consumer satisfaction, an overview of the online payment landscape, tips on getting compliant and more.
Fintech is seeing unprecedented growth worldwide. Between 2017 and 2018, the velocity of global fintech funding increased at an astounding rate. Nearly $57+ billion was invested into fintech during the first half of 2018. In return, worldwide adoption has ramped up by 85%, and time spent on apps is surging, spurred by economic stimulus appointments, and more.
Here’s some more good news.
Online payments and ACH debits surge
A recent Worldpay survey conducted in 36 countries found that the variety of online payments methods is growing, with at least 140 online payment methods currently deployed, and that number continues to grow. Forecasts predict global ecommerce volume will surpass $4.6 trillion a year by 2022, with more than half of that taking place without consumers swiping plastic.
And this year for the first time, according to the Federal Reserve, the number of ACH debit transfers exceeded the number of check payments.
Now Nacha, which manages the development, administration, and governance of the ACH network, has added more daily settlement times through its Same Day ACH volume, boosting ACH traffic and popularity. ACH transactions are attractive because of its ubiquitous adoption and cost-effectiveness compared to card interchange fees and wire transfers. But it’s also why the network is attracting unwanted attention.
The rise in fintech fraud
Growth in adoption means growth in fraud. Last year, the transactional value of attempted fraud was up 13% year over year because vulnerable points are multiplying as demand does.
It includes fintech without verification services; rise in phishing schemes, application scams, and mule recruitment; increase in fraud related to stimulus payments and loans, and more. In the United States, 80% of businesses reported online fraud increases from 2017 to 2018.
Between 2017 and 2018, ACH also saw a tremendous increase in account origination and takeover attacks due to phishing and other social engineering attacks and data breaches. Alongside all this, is a well-documented cybersecurity skills shortage.
To protect financial services providers and their customers and members, stronger internal controls are needed, particularly around account authentication.
Growth in fraud prevention opportunities
Get ready to get compliant. On March 19, 2021, Nacha will launch a WEB Debit Account Validation Rule to combat fraud. The new rule requires account validation be integrated into web-initiated entries in which the consumer’s authorization for a funds transfer is received via the internet.
Additionally, the risk triad for internal fraud consists of pressure, opportunity, and
rationalization. The COVID-19 environment, which has introduced economic instability and widespread remote work, means that companies must be especially vigilant.
The best way to prevent fraud is to introduce new, seamless verification tools to prevent account abandonment, keep up with intel on the latest threats, and communicate emerging risks with team members, to ensure they understand their role in mitigating them.
Fraud prevention offers important new opportunities for financial services companies: By staying on top of fraud intel, you’ll protect your reputation, reduce fraud costs, and introduce operational improvements that save money while increasing consumer satisfaction.
To learn more about leveraging fraud safety measures, how to turn fraud protection compliance into consumer satisfaction, and where to find the best sources for fraud intelligence, plus an overview of the online payment landscape, tips on getting compliant with the new account validation requirements, and more, don’t miss this VB Live event.
Don’t miss out!
Attendees will take away:
- An in-depth look at the Nacha WEB Debit Account Validation Rule
- Broad overview of the current and future online payment landscape
- Lessons from the financial services companies in the fray
- And more
Speakers:
- Jose Colon, Senior Director Solutions Consulting, Yodlee | Envestnet
- Evan Schuman, Moderator, VentureBeat
More speakers to be announced soon!
