Under the NPP, payments and transfers will take just minutes and seconds, with funds immediately available to the recipient – a big win for consumers and businesses alike.
The platform is also set to support overlay services, opening up opportunities for fintech providers and driving payments innovation.
The catch? Fraudsters, too, stand ready to benefit from being able to move money from account to account and out of the country in minutes.
When Faster Payments was launched in the UK in 2008, fraudsters made casino-style attempts to exploit the new capabilities and fraud levels spiked.
I witnessed this first hand as the director of fraud for one of the UK’s largest banks and have been sharing the many lessons learned while here in Australia to speak about NPP at the Cards & Payments Summit & Expo.
To date, Australia has suffered relatively low levels of fraud but the introduction of NPP will be a game changer.
Of course, there are learnings to be had from others who have already moved to faster payments, but the fraudsters also have nearly a decade of experience.
The threat landscape is more aggressive and banking more complex.
Banking is now in the palm of nearly every customer’s hand. Data breaches have expanded and exploded, and ‘cards’ are embedded in mobile devices as portable wallets.
Financial services providers need to think carefully about how they can protect their customers across all the channels used today without intrusive or clunky authentication methods.
What's more, NPP will require them to do this at speed.
Any old or manual processes in use today just aren’t going to keep up with this new world.
Real-time or near real-time payments are going to require real-time analytics to stay on top of the fraudsters who have adopted their own faster ways of dealing with all this innovation.
Another critical element that should frame any faster payments strategy is that we are simply now in a digital world – therefore, all fraud and cyber data should really be incorporated into a single platform to make decisions and risk reviews more deadly for the fraudsters and a better experience for both the service provider and consumer.
Today, this can be facilitated by a fraud management hub, the real-time ability to interconnect the data from cyber-digital end points, login, service use, enrolment and money movement across all of a provider’s customer interactions, channels, products and service.
Now that’s the way to support faster payments ‘2015 style’ and beyond, and should be the objective for anyone in the payments space.
Mary Ann Miller is senior director, fraud executive adviser and industry relations at NICE Actimize, a financial crime prevention, compliance and risk management firm.
