The Future of Fraud: Real-Time Payments and Artificial Intelligence

According to a panel of payments and fraud experts, fraudsters are some of the most creative entrepreneurial people in the industry. And, as technology advances, so do fraud practices and scams. 

For instance, we're already seeing that the level of scams which have existed forever (think Nigerian princes) have become much more sophisticated. Gone are the days of scam emails riddled with misspellings and obvious signs of fraud. Now, scammers can leverage ChatGPT to write more convincing emails. Fraudsters can use the mountain of digital data about a consumer to hyper-target their scams. And, bad actors can impersonate businesses, friends, and family more accurately. 

At the same time, the evolution of the digital payments landscape, including the recent launch of FedNow, could mean more instances of real-time fraud as money moves faster into the hands of bad actors. 

So, in today’s reality of record-high fraud, how do financial institutions and fintechs keep up? Here’s a few things to consider from our panel of payments and fraud experts: 

• Establish real-time fraud reporting as an important foundation. 
• Employ identity and event validation on both sides of payments to ensure they are initiated and received by the right people for the right events. 
• Leverage open banking APIs to create a more seamless, secure environment for payments. “With APIs, you can not only get confirmation of payment, but you can actually put in flexible fraud tools ahead of submission of the payment to the network,” said Bradley Wilkes, CEO, Open Payment Network.

Watch the full replay of this session on The Rise of Fraud and Protecting Payments on MXS Rewind.