There is a particular payments sector that is growing rapidly in Europe, and is raising concerns for competitors across all sectors: financial fraud.
Burgeoning growth in mobile commerce and eCommerce have allowed sales platforms and online payments systems to become more sophisticated. However, these trends haven’t stopped the financial fraudsters who have adapted newer, sophisticated techniques of their own.
European merchants need to be cautious of the changes in fraud and how trends differ in various parts of the continent. Banks need to be deploying effective systems that prevent fraud, while also working towards a solution that works not only domestically, but globally as well.
PYMNTS.com sat down with Martin Warwick, principal consultant at FICO, and Russell Hickman, the director of new markets business expansion at TSYS, whose companies have been working together for some time to better understand fraud protection. Both guests discuss the migration of fraud, trend implications, and how financial players can better protect their operations and their clients.
Fraud migration is a consequence of various European banks that have not yet migrated to advanced payments technology. These regions in Europe have now become the primary target for fraudsters, and rates will continue to suffer if action is not taken.
PYMNTS.com asked Warwick why European banks should be paying attention to fraud migration, and how to best approach a solution.
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“Criminals adapted to changes, and migrated to other countries in Europe. It’s so important to be interested in fraud migration, because if you are one of the banks that are suffering from fraud attacks, then you need to know how to avoid that and push the criminals away,” he explained.
“Having the ability to adapt in change of fraud attacks, and resolve them before you can afford loss, or before upsetting one of your customers at the point of sale, is a real key issue.”
While the growth of the online sales platform has directly influenced an increase in financial crime, Hickman further explained to PYMNTS.com other technologies that are playing a role.
“Another area is the tablets and the mobile applications. A lot of these new applications and technology are becoming less secure than more traditional POS devices,” he said.
“Details are recorded through service cloud for transactions in a CMP model, but how you authenticate the service cloud or how you authenticate the card holder is creating holes that need to be plugged.”
TSYS and FICO state that implementing an adequate fraud servicing model is integral to support newer banking technology and the cloud software being used throughout Europe.
Warwick stated, “One of the things we see in fraud migrating over to Europe, is a lot of the legacy systems do not have the capabilities to combat and counter fraud arising on those newer devices or service clouds.”
This is where solutions are required to be put in place to fill these gaps and battle fraud in payments.
TSYS and FICO are hosting a webinar on this topic on Tuesday, 16th July. Martin and Hickman have made a commitment to discuss this topic in greater depth during the webinar. To catch a sneak peek of their discussion, listen to the full podcast below.
Click here for more details about the upcoming TSYS and FICO Fraud Webinar and information on how to register.
*If you have trouble with the audio player above, click here.
Russell Hickman – Director, New Markets Business Expansion, TSYS
Russell Hickman has spent more than 25 years designing agile and efficient issuing and acquiring payment system solutions. Russell has responsibility to establish new markets and develop new valued service offerings for the European market; accelerating growth, best practice and new ideas.
Martin Warwick – Principal Consultant FICO
Martin Warwick joined FICO as a principal consultant with specific responsibilities in Fraud Consulting in September 2007. Martin previously headed up the Fraud Operations at Barclaycard with responsibility for over 20 million plastic cards. He led a team of over 400 people in the fight against plastic card fraud.
He has over 28 years of plastic card experience with Barclaycard in various roles and responsibilities including fraud, work study, operations and projects. Martin was also heavily involved in major industry fraud prevention initiatives such as the roll out of Chip & PIN.
In addition, Martin has been invited to participate in several industry groups. He chaired the UK Risk Advisors group and served as an advisor on the European and International Risk Advisors group for Visa, and was a member of the Plastic Fraud Prevention Forum at APACS for many years.
Martin regularly speaks in the UK and Europe on various topics around plastic card fraud prevention.
