An increasingly digital economic landscape and growing competition is forcing businesses to offer innovative services and products to their customers. Digital transformation has given rise to a number of means that facilitate faster payment methods. These include credit cards, online funds transfer, digital wallets, P2P transfers, cryptocurrencies, and so forth.
Exploit and escape unchallenged
As more and more customers adopt digital channels, it becomes onerous for businesses to ensure that the customers are actually who they claim to be. Many businesses are still not adequately prepared to fight the onslaught of growing fraud owing to the numerous opportunities brought forth by an expanding digital universe. Also, cyber criminals have become adept at impersonating authentic users, thanks to volumes of personally identifiable customer information that they have. This allows them to exploit every available lacuna for financial gain.
Unlike traditional payment methods where financial institutions enjoyed enough time to verify the customers; faster payments afford businesses no time, as they must authenticate users in near real-time. This lack of time for an in-depth review often causes businesses to miss suspicious activity, which allows cyber criminals to escape with their exploits, undetected.
Businesses are inadequately prepared
In order to stay relevant and meet customer expectations, businesses are obliged to extend faster payments and ensure a frictionless customer experience. As a result, many businesses are left to absorb fraud losses as a cost of doing business. Some businesses are adopting multi-factor authentication (MFA) and tokenization to stop cyber criminals from inflicting losses and jeopardizing users’ digital experience.
However, as mentioned before, most businesses are still not prepared to fight the sophisticated and strategic attacks that cyber criminals plan. This is one of the reasons, many traditional banks are wary of rolling out mechanisms to facilitate faster payments. A direct fallout of this lack of preparation is the loss of revenue and customers who may choose to transact with a competitor that offers this convenience.
Keep pace and prepare for evolving threats
Digital businesses, especially, financial institutions must keep pace with the changing market dynamics and, therefore, leverage customer data to derive actionable insights. They must combine these insights with the latest technologies such as artificial intelligence, machine learning, and behavioral biometrics to understand the true intent of a user. It is also important for businesses to understand evolving attack tactics from every user session, so they can protect themselves from probable attacks in the future.
The article has been written by Neetu Katyal, Content and Marketing Consultant
She can be reached on LinkedIn.