Fintech Forward Newsletter - Issue 5
25 September 2024
With businesses and consumers across the world making and receiving payments every second of every day, the payments ecosystem is one of the most data-rich in financial services. In this week’s newsletter, we explore key emerging trends and also discover what experts believe lies ahead, particularly as AI use cases mature.
As business-targeted payment fraud is expected to surge before the year is out, organisations must clearly seek to put in processes that safeguard customer data, trust and regulatory compliance. As we learn from The Banker, fraud detection models are becoming increasingly vital in the fight against criminal activity, but this line of defence comes with its own unique risks, such as bias and hallucinations.
We also discover how faster payments aren’t always safer payments, with Datos Insights shedding light on the benefits of slowing down certain elements to help combat the rise in fraud.
With data richness and AI fuelling the rise of so much innovation in the payments space, how will the ecosystem evolve alongside the countervailing forces of regulation and fraud?
B2B payment fraud poised for 2024 surge
Business-targeted payment fraud is expected to rise this year, posing serious risks to customer trust, sales, and regulatory compliance. A recent Creditsafe survey revealed that 53% of respondents have already experienced up to six fraud incidents, surpassing last year’s total of 52%.
Datos Insights: Trends in faster payments fraud
A range of market forces leads each region to adopt unique approaches to countering faster payments fraud. However, a common trend across many markets is the ironic shift towards slowing certain aspects of faster payments to better manage the rise in fraud.
Regulatory oversight vital as payments fraud detection AI matures
With such a rich ecosystem of data, payments use cases for AI are growing. Predictive analytics and anomaly detection models for fraud analysis are being developed by major financial institutions across the globe but concerns around bias and hallucinations are fueling fears around data leaks and evolving regulation. The key to compliance and confidence in predictive models is the ability to explain their processes.
Tip
Gen AI emerges as effective weapon in banks’ war to reduce false positives
The “Generative AI Tracker®” uncovers the capabilities and emerging use cases in transforming fraud fighting while looking at privacy concerns, bias and regulation.
Webinar
Keeping fraud out of online payments
Watch this webinar from the Payments Association on best practices for organisations to build a robust payments fraud prevention program and how to strike a balance between identity fraud detection and the ideal user experience.
Blog post
The future of AI in financial services
Financial services businesses may be investing heavily while experimenting with AI, but the majority are still reluctant to make extensive, strategic investments, leaving more confident early adopters to shoulder innovation costs and risk. Even the current early adopters remain cautious about the regulatory and ethical complexities related to AI.
Report
B2B Financial Technology Buy-cycle
This report is a data-driven assessment of the unique challenges, attitudes and behaviors that define the buying mindset of senior bank decision-makers. Check out the full report comparing attitudes of senior bank decision-makers with their peers in other industries.