The Fraud Trap: Optimizing Digital Payment Controls From Day One
- Date:May 10, 2018
- Author(s):
- Test
- Sean Sposito
- Report Details: 28 pages, 7 graphics
- Research Topic(s):
- Fraud Management
- Fraud & Security
- PAID CONTENT
Overview
The payment industry is witnessing evolution at a rate that was once inconceivable. And despite the efforts of financial institutions and issuers to prepare for the attempts of fraudsters that inevitably follow the introduction of new forms of payment, there continue to be major, but avoidable, fraud events. At the center of it all is a phenomenon: a general misalignment that often forms on day one between the readiness of FIs and the true fraud risks that accompany payment innovations. In this new world of payment technology, understanding how the alignment between the adoption of payments and fraud controls breaks down from the start is critical. Without it, FIs will continue to fall into the same trap, experiencing avoidable losses and the kind of regulatory scrutiny and reputational damage that undermines consumer confidence and adoption of these new ways to pay and get paid.
This original report, sponsored by ACI, examines how the recent evolution of payments has influenced the choices that institutions make when managing for fraud, the implications of those choices, and opportunities to more effectively get ahead of fraudsters in this new era of digital payments.
This research report was independently produced by Javelin Strategy & Research. Javelin Strategy & Research maintains complete independence in its data collection, findings, and analysis.
Methodology
Consumer data
Consumer data in this report is based on information gathered in several Javelin surveys administered in 2015, 2016 and 2017. Data was gathered and weighted to reflect a representative sample of the adult U.S. population:
- A random-sample survey of 3,000 respondents conducted online in October-November 2017. The overall margin of error is +1.74 at the 95% confidence level. The margin of error is larger for subsets.
- A random-sample survey of 3,200 respondents conducted online in October 2016. The overall margin of error is ±1.74 at the 95% confidence level. The margin of error is larger for subsets.
- A random-sample survey of 3,200 respondents conducted online in October 2015. The margin of sampling error is ±1.74% at the 95% confidence level. The margin of error is larger for subsets.
Mobile scorecards
Scorecard data in this report is based on Javelin evaluated mobile banking features of the nation’s largest retail FIs total by deposits, excluding banks focused on investment banking. Surveys were administered from 2009 to 2015.
In support of this research Javelin interviewed financial industry executives in payment risk and fraud across different markets, including the U.S. and APAC.
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