Harnessing seamless digital experiences for growth in payments market

Payments sector needs to strike a balance between convenience and security.

Amidst a changing payments landscape, many are seeing technology trends play out to drive growth in the market. These trends have been the result of shifting consumer patterns, adaptation from the impacts of the recent public health crisis, and a strong push from the regulatory framework.

The growth of the payments space also signifies the prevalence of digital payment channels such as mobile apps, platforms, and payment terminals that financial firms should watch out for over the years amidst changing behaviours and business models.

Whilst these changes are certainly going to be embraced, industry players also have to be aware as early as now of the challenges that come with such shifts. Similar to other industries that are starting to incorporate the digital into their operations, the payments category should strike a balance amongst security, convenience, and choice for consumers.

To further explore what this means for the industry, as well as the future of the payments space in an evolving digital landscape, Asian Banking and Finance hosted a virtual roundtable event in partnership with tech company Outseer. Entitled “Secure and Frictionless Fintech Journey,” the roundtable discussion looked into the drivers of growth in the digital payments space and what customers can expect from them.

Outseer’s leader in Payments Security, Asia Pacific and Japan Ramesh Nagarajan, who is amongst the speakers in the event, highlighted that whilst the new platforms are growing, cyber criminals are actually using the same techniques that genuine banks and financial institutions are using to attack their customers confidence and trust as a result of payments moving online.

“Fraudsters are essentially using the same stolen data acquisitions to actually create stolen credit card information and they actually use that information to create synthetic identities.   “As consumer buying behaviour has shifted to a digital-first experience throughout this seemingly endless pandemic, newer payment models and transaction methods continue to proliferate.  It should come as no surprise that digital transaction fraud has skyrocketed to new heights.   Digital businesses must prioritize strong and effective fraud prevention measures to protect their brand and their customers.” Nagarajan said.

He added that as the “bad guys” work together to undermine consumer confidence and the whole trust in the financial well being, the “good guys” also need to work together to combat fraud.

John Wong, Hang Seng Bank managing director and head of global liquidity and cash management, also followed through on this and mentioned how their bank utilises risk identification and detection framework to prevent these issues from occurring.

He mentioned that in this process, their bank starts to look into and from the individual customer perspective, into the industry they are operating in, then the historical trends and patterns they are adopting, and into the bigger picture. He also said that they are also learning data analytics to view their risk prevention and detection model.

Wong added that whilst there are lots of investigations being done in the process, they have been deploying AI from behind to help them identify fraudulent patterns.

“Equally, from the network perspective, we also perform trials and there were assessment model by which to look into the hardware that the customer, they bought the IP address transmitting with us and also what the transaction origination and the pattern is something in direct to customer bases or the user behaviour,” he said.

Increasing security measures 

HSBC’s Senior Vice President and Regional Lead of Global Liquidity and Cash Management Abhishek Kapoor, who is amongst the panelists in the event, emphasised that whilst organisations can plan many steps ahead, the technology is moving so fast that it provides fraudsters and cyber attack proponents the ability to move faster especially in a large organisation. He added that companies need to focus on protection as the current technologies make it far more difficult to deliver towards prevention plans.

“However, as conversations have already revealed today and will continue to show we are actually far more adept at handling every kind of situation, that maybe, just maybe a year ago or a couple of years ago, I believe the financial services industry is taking the war on fraud very seriously, and protecting the interests of not only ourselves but even our customers is growth trajectories,” he added.

Wong also pointed out that as a banker, they have to optimise the investment required in security as having a robust cybersecurity model in place is costly. He mentioned that cybersecurity is not a one-off investment and that they need to continue to outweigh in order to tackle the issue.

“I think apart from [us], ourselves, we also have to educate the customers, because customers are coming from different origins, they've got different backgrounds and even understanding whether it's full, the bank covers, escrows, social media to use, or in the particular banking apps that we are developing,” Wong said.

To watch the recap of the roundtable, please visit this link here.