Money 20/20 Europe: Collaborate not compete to defeat card fraud
Payment companies need to collaborate, not compete, when it comes to dealing with the threat of card fraud.
At this morning’s (5 April) session, “Innovations in card not present fraud” at Money 20/20 in Copenhagen, a panel discussed the issue in a lively and quick chat.
Present were moderator Andrew Jamieson, head of innovations, UL; Susanne Bronnum, country manager for Nets in Denmark, group executive vice president, card services, Nets; Monica Eaton-Cardone, CIO and co-founder, Global Risk Technologies; Catherine Moore, MD and president, JP Morgan Commerce Solutions; and Nicolas Raffin, head of strategic marketing and innovation, Oberthur Technologies.
Jamieson began the session by getting the audience’s opinions straight away.
A quick poll found out that nearly 50% of the attendees had experienced card fraud – so it was certainly of interest to them.
Moore says it is important to look at the categories of fraud, as the industry needs to get “smarter” about analytics. She describes it as a “constant dance” as companies seek to eradicate the problem.
Jamieson agrees and says the problem is “growing” – so at least the firms are trying to solve the issues and are not burying their heads in the sand.
Eaton-Cardone says “are the criminal masterminds doing this?” or is it case of “educating” the card holders about due diligence. Within the industry consumers are evolving with the technology and “we have to work hard to let them know” about issues and threats.
She makes a good point that “maybe customers are not always right”.
Bronnum adds that card acquirers and issuers need to be more “open” about what is happening. A point that Eaton-Cardone agrees with: “We are not islands when it comes to fraud – everyone is affected.”
Moore believes fraud is “hurting everyone”, whether companies or consumers, and it is “damaging our reputation”.
The panel agree there needs to be more collaboration, although Moore believes “we are on the right track”.
When it comes to dealing with fraud, it costs money. And a lot of it.
Bronnum says: “For small and medium sized banks, fraud is so organised, an organisation needs substantial reserves to deal with it. Some of these banks have to outsource to deal with it.”
But it seems size doesn’t matter.
Raffin says: “For big banks it’s also an issue. They are siloed and all the people don’t communicate to or know each other. It’s complicated for them as well.”
Jamieson adds: “There is a genuine risk and we have an asymmetric war on our hands. There is lots of money for the criminal elements, and while large banks have the resources they may lack the technological inertia to deal with it. For smaller banks, they may not have money but do have the desire.”
There may be a solution to this.
Eaton-Cardone says: “We will see a trend to more outsourcing to deal with fraud – as it’s impossible to scale.”
So as Jamieson comments, companies may need to share more as it’s an industry-wide problem.
A good and lively discussion, but whether companies can control their natural competitive instincts to work together to tackle fraud is going to be interesting.