TREND 1TREND 2TREND 3 TREND 4 TREND 5 GEN Z RISINGUX IS THE NEW GOLDMOBILE HIT ITS GROOVEREWARDS REVOLUTION THE NETWORK EFFECT TREND 6TREND 7TREND 8 TREND 9 TREND 10 FINTECH AND BANK FUSIONAN ARMS RACE IN CODEPAYMENTS EVERYWHEREFRAUDSTERS INNOVATE TOORIP AND REPLACE REQUIRED TREND 9 FRAUDSTERS INNOVATE TOO Criminals are making it their full-time job to out innovate the payments industry. In this industry, the battle between good and evil is between payments companies and fraudsters. It goes like this. The industry erects new security protections, and the bad guys get around them. Over and over. Unfortunately, EMV has not stopped card fraud, and there can be no letting down of defenses. Security frameworks must advance, evolve, mutate and morph as security threats do. Credit card fraud did not end with EMV. It is shifting. Think of it like squeezing a balloon. Put pressure on one area, and the air naturally moves into another. Following a few years of sharp rises in merchant breaches and counterfeit fraud, fraudsters are focused on card-not-present transaction fraud. The industry could expect $31.3 billion in global card losses in 2018, which have increased 7 by 18 percent every year since 2013. It is no wonder that bankers view data security as among the top challenges to compete in payments today.8 This challenge will get tougher. Bad guys love workarounds, and they keep raising the bar on innovation. For example, identity imposters are evolving. Not only are criminals using stolen identification to open credit lines, they are now creating new, digital-only identities by knitting together real and fictitious information. These “synthetic identities” exist only in the digital matrix. While the exact magnitude of synthetic fraud remains uncertain, estimates of financial industry losses range into the billions. Existing fraud detection models are designed to prevent transaction fraud, and cannot address these threats. Even fake fingerprints can outwit fingerprint sensors on smartphones. In addition, fraudsters can infiltrate cardholder authentication channels (mobile, online, and call center) to place false alerts and “verify” fraudulent activity. Banks and card companies must push to out-innovate fraudsters. Some are using new technologies for digital applications and online, mobile and call center servicing channels. With geolocation data, banks can compare the location of the device used to complete an application or transaction with the applicant’s or cardholder’s stated location to evaluate the likelihood of fraud. Acoustic analysis evaluates risk in call center interactions by analyzing background noise during inbound calls to help confirm callers’ true location. These are steps in the right direction, but this game of cat-and-mouse will get more complex. 12 | DRIVING THE FUTURE OF PAYMENTS 10 MEGA TRENDS Copyright © 2017 Accenture. All rights reserved.