Over the past fifteen years, the financial landscape has undergone a profound transformation in payments – from slow cheque clearances to instant credits, and from fixed payment windows to on-demand, round-the-clock transactions across multiple channels.

While these advancements have significantly enhanced consumer convenience and transaction speed, they have also opened doors for increased financial fraud and money laundering, exploiting the immediacy and reduced friction in modern payment systems.

As consumers worldwide demand quicker and more convenient payment options, both domestically and internationally, financial institutions face a critical challenge: how to balance speed and safety effectively to meet these demands while preventing fraudulent activities.

Advertisement

The global journey of instant payments

The Council of the European Union recently mandated the availability of instant payments in euros across EU and EEA countries. This regulation requires all payment service providers (PSPs) to enable consumers and businesses to send and receive euro payments within 10 seconds, 24/7, throughout the EU and EEA.

The EU began its journey with instant payments in 2017 with SEPA instant credit transfers, initially adopted by a limited number of banks. As demand grew and the benefits of immediate settlements became evident, the EU expanded this initiative, culminating in the recent regulation for all PSPs to facilitate affordable and accessible instant payments across the region.

Globally, instant payments have reshaped the financial service landscape in several countries, such as the UK’s Faster Payments, India’s IMPS, Africa’s Rapid Payments Program (RPP), and Brazil’s Pix. Similar systems like Australia’s New Payment Platform (NPP), the US’ FedNow, and Canada’s upcoming Real-time Rails (RTR) are also poised for significant impact.

Speed and convenience vs. the risk of accelerated fraud

Advertisement

Instant payments execute transactions in real-time, often delivering funds to recipients within seconds. However, this immediacy poses a risk: fraudulent transactions can be completed before consumers have a chance to intervene, leading to swift loss of funds and complex recovery processes.

Authorised push payment (APP) fraud, where consumers are deceived into authorising payments to criminals, has become prevalent worldwide. Criminals exploit various tactics, including identity theft and social engineering, to manipulate unsuspecting individuals into transferring funds. Once transferred, funds are swiftly moved across multiple banks and jurisdictions, making recovery nearly impossible.

Mitigating fraud in real-time

While traditional payment fraud prevention methods have evolved over the past decade, instant payments present unique challenges due to the sheer volume and speed of transactions. Technologies like Confirmation of Payee (CoP) in the UK, Verification of Payee (VoP) in the EU, and IBAN name confirmation are being implemented to enhance fraud prevention by allowing consumers to verify payee details before authorising payments.

However, combating fraud in instant payments requires multi-layered approaches. Advanced fraud detection systems leverage machine learning models to analyze data from various layers – network, device, application, and account – to detect anomalies indicative of fraudulent activities before payments are executed. Behavioral biometrics tools track user interactions during transactions, identifying suspicious behaviors such as device hijacking or unusual transaction patterns.

Advertisement

Emerging regulatory frameworks, such as the UK’s PSR3 regulation, which mandates shared liability between sending and receiving banks for APP fraud losses, are setting precedents globally. This shift necessitates recipient banks to monitor incoming payments for fraud, marking a significant shift in fraud prevention strategies.

Looking ahead

As instant payments continue to gain momentum globally, collaboration among banks, regulators, and industry stakeholders is crucial to develop standardized frameworks and best practices for fraud prevention. Establishing uniform approaches across jurisdictions will be essential to effectively combat evolving fraud tactics and safeguard consumer interests in the fast-paced world of instant payments.

Source: fintechfutures.com

The post The rise of instant payments: protecting consumers from criminals in 10 seconds appeared first on HIPTHER Alerts.

Advertisement

SINGAPORE and MANILA, Philippines, July 2, 2024 /PRNewswire/ — Gupshup, the world’s leading Conversation Cloud today announced its partnership with Tonik Bank, the first digital-only neobank in the Philippines, to develop a state-of-the-art Generative AI chatbot for Tonik’s mobile app. The innovative solution aims to provide Tonik’s customers with instant and accurate answers to frequently asked questions, revolutionizing the way they interact with their bank.

The Generative AI chatbot, powered by Gupshup’s advanced natural language processing (NLP) and machine learning (ML) technologies, is designed to understand and respond to customer queries with human-like precision and empathy. By leveraging the latest advancements in AI, the chatbot can engage in contextual conversations, providing personalized and relevant information to each customer.

Advertisement

Tonik is the first digital bank in the Philippines to leverage Generative AI for customer service. By integrating the chatbot into their mobile app, Tonik Bank aims to provide their customers with instant access to information, reducing wait times and improving overall satisfaction.

“The integration of Gupshup’s ACE LLM into our operations has been truly transformative. We’ve witnessed significant value in its ability to automate routine tasks, elevate customer service, and boost our overall efficiency. This technology has the potential to revolutionize our operations, and we are excited to further explore its capabilities and implement it across our business,” said Sateesh Reddy, Deputy Chief Technology Officer of Tonik Bank. 

Since the implementation of Gupshup’s technology, nine out of ten customer queries are now directed through Tonik’s in-app chat feature, where the AI autonomously resolves 75% of the queries without human intervention. This has not only amplified the efficiency of Tonik’s in-house customer care team by 4.3 times but also empowered them to dedicate more time to resolving intricate issues, ensuring that customers receive the personalized support they need.

The Generative AI chatbot solution is expected to generate significant cost savings for Tonik, with an estimated total of over USD 20 million over the next three years.

“Our partnership with Tonik Bank exemplifies the future of BFSI. As the sector evolves, Gen AI will be crucial to deliver seamless, personalized, and efficient customer experiences. Our chatbot solution is designed to do just that, empowering banks like Tonik to focus on what matters most – building strong relationships with their customers,” said Beerud Sheth, Co-founder and CEO of Gupshup.

Advertisement

Photo: https://mma.prnewswire.com/media/2451874/Gupshup_Tonik.jpg
Logo: https://mma.prnewswire.com/media/2182479/Gupshup_Logo.jpg

View original content to download multimedia:https://www.prnewswire.co.uk/news-releases/gupshup-collaborates-with-philippines-leading-neobank-tonik-offers-generative-ai-chatbot-to-bring-innovation-in-digital-banking-302186820.html

The Corporate Sustainability Due Diligence Directive (CSDDD) is set to have a profound impact on the corporate landscape across Europe.

Following its announcement in the Official Journal of the European Union, the CSDDD will become enforceable within 20 days. Member States are required to integrate the directive into their national legislation within two years from this date. Companies will then have an additional year to align with the requirements before the directive comes into full effect. The implementation will be gradual, spanning over three to five years, suggesting initial compliance efforts may commence as early as the second or third quarter of 2027.

Foreign companies with substantial operations in the EU will be significantly affected by the CSDDD. Specifically, entities with an annual net turnover exceeding €450 million within the EU, including their EU-established affiliates meeting this financial threshold, will fall under the directive’s purview. Notably, the directive does not specify minimum employee thresholds for these foreign entities.

Advertisement

Businesses serving as suppliers to entities impacted by the CSDDD must prepare for heightened scrutiny and engagement. Initial requirements will focus on suppliers disclosing their approaches to managing human rights risks within their operations. This disclosure is part of a broader risk assessment aimed at identifying potential issues throughout the supply chain. Depending on the assessment outcomes, deeper engagement activities with higher-risk suppliers may include surveys, detailed discussions, and on-site evaluations.

The CSDDD draws on established guidelines for assessing human rights and environmental risks, such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. These frameworks are essential for effectively evaluating risks not only within companies’ direct operations but also across their entire spectrum of activities.

Consistency in due diligence practices is emphasized, particularly for operations where companies have greater control over processes and direct access to stakeholders. The CSDDD defines the ‘chain of activities’ more narrowly than the ‘value chain’ under the Corporate Sustainability Reporting Directive (CSRD). It focuses on immediate business partner activities like distribution and storage, excluding controlled export activities such as weapons and munitions.

The knowledge and methodologies developed under the CSRD and the European Sustainability Reporting Standards (ESRS) will be crucial in preparing for CSDDD compliance. However, the directive necessitates more detailed and specific engagement and assessment practices, particularly in stakeholder mapping and involvement across the value chain.

While the CSRD’s double materiality assessments can highlight potential impact areas, CSDDD compliance demands a deeper examination and strategic engagement concerning areas identified as having significant adverse impacts. As companies prepare for the CSDDD rollout, aligning with these rigorous standards will be essential to navigate the evolving regulatory landscape effectively.

Advertisement

Source: fintech.global

The post How companies can gear up for CSDDD compliance by 2027 appeared first on HIPTHER Alerts.