As businesses work to keep out fraud and curb false declines in the year ahead, they must bear in mind that context is key. In the Digital Fraud Tracker, TSYS’ Dondi Black explains how companies can tap AI and machine learning to verify data points and use context — such as location — to go long on security while creating a frictionless customer experience.
Fraud had a record-breaking year in 2021, so prudent companies are taking special care to stay informed, aware and cautious in the year ahead.
Whether fraudsters up their games in 2022 or not, many in the banking and payments industries are looking to strike back. Dondi Black, senior vice president and head of product at Georgia-based TSYS, a Global Payments company, believes that this challenge comes with the territory, as banking itself is what she calls the business of risk.
“Our payment clients are perpetually navigating [a] fine line, trying to keep [the] balance between protecting all of us as consumers and businesses [and] delivering really great experiences that make our lives easier,” she told PYMNTS in a recent interview. “Fast, simple and secure — that’s the North Star.”
Black contends that the role of payment providers includes protecting the life cycle of each transaction from the point of origination to settlement. Guarding against rising threats, she said, will require companies to leverage cutting-edge technologies to analyze and authenticate every transaction as it happens in real time.
Building the fraud prevention of the future
Black said that to address today’s growing fraud problem, it is vital to acknowledge that we have entered a new era, one in which the major parts of our lives — professional, financial and personal — have gone online, making for new risks.
“I think we all recognize the digital transformation was well on its way before the entire world paused and pivoted to meet the challenges of the pandemic,” she said. “[We have] new ways for making payments [and] for accepting payments, and that [has] translated to more surface area to protect [and] more points of potential compromise for fraudsters to exploit.”
Synthetic identities, card-not-present (CNP) fraud and account takeovers (ATOs) are the fraud trends Black said TSYS has seen rising throughout 2021. Although she was quick to say that no one has a crystal ball, she does not think these security risks are going away anytime soon. She instead predicts they will continue to drive risk management for banks, credit unions and FinTechs for years to come.
“Modern fraud schemes are generally going to be multifaceted,” she said.
Black anticipates that anti-fraud technologies, therefore, are also going to be an integral part of the payments space in 2022. She believes that new technologies such as artificial intelligence and machine learning will become a standard part of security practice to protect payment gateways by ensuring that every payment is valid and secure when going from point A to point B.
“That means validating and interrogating data points that can be directly verified [via] things like a name matched to a Social Security number … and other data points that might [be used] for detection and prevention, such as device ID or applying 3D Secure technologies,” she said.
These technologies are able to use context — such as location — to eliminate false positives and create nearly frictionless experiences for consumers.
“I think we all recognize that fraud prevention with a broad brush leads to bad customer experiences in many cases and high false-positive declines,” Black said, “and that’s not good for anyone.”
Both the payments world and the technologies within it are constantly changing, she said, and fraudsters are sharp, so payments providers must be ready.
“We all have to focus on moving forward together, and I think that’s really the future of fraud prevention for the industry,” she concluded.