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The Buzz from BAI: Fraud, Mobile and Innovation in Payments

I spent a good portion of my week at the BAI Payments Connect 2013 conference which was held at the Phoenix Convention Center in Arizona.  This year the agenda included tracks on Consumer Payments Insights, The Future of Payments Fraud, Payments Innovation and Check Imaging.

With nearly 750 participants, the conference provided the opportunity for the financial community attendees and their vendors to meet, share, socialize, learn and inform.

The vibe I got in the sessions and from the expo floor was that fraud and mobile continue to create the most buzz. Familiar themes of reinforcing fraud strategies like staying ahead of new, emerging threats in the online and mobile banking channels addition to old standbys like check or ATM fraud, sorting out the implications of a mobile society and related loyalty/retention, and understanding how customers want to engage with their banking institutions are all prevalent concerns requiring well-thought strategic plans in order to stay competitive.   There was an under-pining sense that fraud managers must stay vigilant to combat fraud and that the lessons learned from online banking fraud have made their way into monitoring mobile banking fraud.  It was also apparent that the bankers see the need to work with their customers in the fraud prevention process, think mobile alerting, but they must maintain a balance of communication without being obtrusive.

I found the session on payment hubs rather honest yet insightful. Panelists from 3 major banks gave first-hand accounts on how they have embarked on a payments hub strategy and the success and missteps in their endeavors.  The common thread among the panelists was that in order to ensure a consistent client experience across business lines, the goal must be about transforming business not just integrating business.  I think we’d all agree that to be innovative we need to have flexible business services that shorten time-to-market efforts.  However the panelists shared insight, and agreed, that a phased approach proved better results, meaning don’t take on too much when embarking such a strategic initiative.  In fact, the most honest statement I heard from one banker was that when they sat down with their internal subject matter experts, they were surprised at how few people internally could articulate the full end-to-end nature of their payment processes. Turns out, most employees only knew part of the process (normally the part they own), but very few could articulate the whole thing.  This resulted in a deep-dive effort to map out all critical components from messaging systems and platforms to clearing and settlement functions to liquidity monitoring and risk management to reporting and client services.

ACI’s Mike Braatz, Senior Vice President and Product Line Manager, Payments Fraud participated in a panel on “Countering the Cyber Fraud Threat” where the layered approach to fraud prevention and detection dominated the conversation.  The lively panel discussion discussed the combined merits of front-end authentication, device identification and transaction monitoring.  In addition, Mike presented a session with Aite Group entitled “How Your Customers Think About Fraud”. This session laid out key research based on an ACI global survey of 5100 consumers and recommendations for best practices for FI’s for avoiding back of wallet activity for consumers experiencing fraud.

It was good to see the FI’s and vendors in deep dialogue on the expo floor.  With more than 70 vendors participating, most attendees were interested in learning about the tools available today to meet the challenges of managing payments fraud and competing in the age of payments innovation and mobile. 

 

 

The buzz from BAI: Fraud, Mobile and Innovation in Payments by Michael Grillo