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BizReport : Ecommerce archives : June 01, 2016

Expert: Why brands need to be hyper-aware of fintech challenges

There have been many advancements in the past 5 years aimed at keeping consumers - and businesses - data private and safe. But these advancements aren't a fail-safe, as one expert explains.

by Kristina Knight

Kristina: Apple and Android Pay, chip cards...these were all created to keep consumers' money safe. Why aren't they?

Vanita Pandey, VP of Product Marketing, ThreatMatrix: The big issue facing businesses isn't the actual transaction process, but the ability to authenticate the digital user efficiently and without friction. Tools like Apple Pay and chip cards are designed to protect the transaction by augmenting the authorization process. These innovations make defrauding the transactions difficult, but cybercriminals are fast evolving their techniques to find additional vulnerabilities thanks to recent data breaches. The move to chip cards and the rise of mobile payments have created an environment in which fraud has migrated to digital channels and identity has become the new currency.

Kristina: Why do businesses need to be more aware of the dangers in financial technology?

Vanita: Digital commerce is providing a launch platform for small or niche businesses that previously struggled to keep up with the established players. Internet-only banks, small lenders and niche insurance brokers can now respond with more agility to meet the evolving needs of digital consumers including the unbanked and underbanked population who previously had little access to traditional banking services. These fintech players use technology to create financial products that offer a better user experience, enable faster decision making and have global applicability.

Kristina: What is the biggest factor in making these systems work better:

Vanita: The biggest underlying factor in the success of these products and platforms is their ability to use data to effectively distinguish between trusted customers and fraudsters. However, compromised identities resulting from massive data breaches and malware are exploited by global cybercriminals using cloaking technologies such as proxies or spoofed locations to mask their true identities and whereabouts. These stolen identities and criminally-synthesized false identities drive an increase in fraud targeting these fintech providers.

Kristina: How can businesses protect themselves from fraudsters?

Vanita: Cybercrime attacks will continue to grow as cybercriminals collect, compile and share information in order to build profiles that are increasingly indistinguishable from authentic identities. We strongly believe that businesses need digital identities to deliver a great customer experience while stopping fraudsters. Digital identities are made up of a combination of device, identity, behavior and threat information. Any one of these four attributes in isolation cannot verify a true identity. True digital identities come to life as information is dynamically combined and analyzed in the context of each and every transaction. This enables businesses to know with great certainty who their users truly are.

More from Vanita and ThreatMatrix later this week, including what the future for fintech looks like.

Tags: ecommerce, financial technology, fintech, ThreatMatrix

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