Trust is the real-time payments differentiator for fraud prevention
Instant payments and tokenisation are reshaping financial services – but speed, availability and choice can only increase value if clients can rely on them safely, connect to them simply, and scale them across markets consistently.
This is why trust is now the differentiator for real-time payment providers – especially when it comes to fraud prevention.
Predict and prevent
‘Irrevocability’ in an instant payments environment is what creates value, certainty, speed and confidence for the customer. But it also changes the fraud equation. Once funds move in real time, there is often little or no opportunity to investigate, recall or reverse a payment after the event.
This means fraud management has to move decisively from ‘detect and recover’ to ‘predict and prevent’, with controls embedded much earlier in the payment journey.
That points to banks and payment providers doing two things particularly well. First, being able to help customers identify and avoid scams before they authorise a payment. This is particularly the case for impersonation and social-engineering attacks, where criminals create urgency while posing as a bank, supplier, executive or other trusted counterparty.
Second, when a suspicious payment may already have been made, the reporting journey should be fast, structured and actionable to help enable investigations, intelligence sharing and any attempted intervention to begin immediately.
Multi-layered defence
When it comes to fraud prevention in real-time payments, this often requires a multi-layered defence combining strong customer authentication, real-time behavioural analytics, device and network intelligence.
Artificial intelligence can play an important role through anomaly detection and contextual risk assessment execution before the event, and after by accelerating investigations through linking related entities — such as devices, accounts and beneficiaries — to identifying mule networks and emerging typologies.
The critical point is that these capabilities should operate with appropriate human oversight, so decisions remain explainable, consistent and trusted.
A collective response
Prevention isn’t likely to be solved by banks in isolation. Fraudsters are already using AI to scale, personalise and industrialise attacks, so the response increasingly benefits from being collective.
Banks, corporates, payment service providers, regulators and technology partners may need to share intelligence faster, align around common signals of risk, and respond together to evolving patterns.
At HSBC, we’re working closely with industry partners to share best practice, strengthen common standards and develop more coordinated approaches to fraud prevention.
In a real-time payments world, trust will increasingly depend not only on how quickly money moves, but on how confidently the ecosystem can stop the wrong money from moving in the first place.
A fuller version of this article was first published by Payment Expert (opens in new window) .