A new white paper from Visa, Using Artificial Intelligence to Secure the Future of Payments, investigates the changing characteristics of the fraud landscape and, as the title suggests, the central role that Artificial Intelligence (AI) is coming to play in effective risk management strategies.
And it explains why it’s necessary for fraud management teams to adapt their approach accordingly – by deploying the latest generation of AI-enabled tools and technologies, and ensuring they have the right mix of skills and expertise on board.
Fraud Landscape Becoming More Complex
The fact is, Visa argues, the fraud landscape is becoming far more complex.
As the industry evolves from a four-party system to a true multi-party ecosystem, the attack surface becomes larger, the lines of responsibility become more blurred, and the potential points of compromise become more numerous.
Meanwhile, fraudsters are collaborating like never before and adopting their own AI-enabled technologies, and consumers are demanding ever-more seamless digital experiences.
The sector is therefore moving from a highly complex to a hyper-complex environment.
At the same time, in order to engage and retain customers, and stand out from the competition, issuers are focusing increasingly on building better digital experiences.
Often, this means that they want to remove more friction and bring more convenience to the customer experience which can, in turn, bring more complexity and introduce additional risk.
Given the extent of the challenge, the card-based payment sector has performed incredibly well.
Visa alone has invested more than $10 billion in cybersecurity protection over the last five years, preventing an estimated $41 billion worth of fraudulent transactions in the past year, and reducing the fraud rate on at-risk accounts by more than 21%.
Managing Fraud Performance
To help individual issuers to manage their fraud performance – while also approving more good transactions and removing friction and roadblocks from the customer experience – a growing suite of Artificial Intelligence-enabled, scheme-agnostic tools are offered as part of the Visa Protect range of enterprise risk solutions.
But, for many banks, especially smaller banks, the challenge is not just to deploy the right tools.
It can also be difficult to nurture the skills and the experience needed to develop an up-to-date fraud management strategy, to track and analyse the ongoing fraud management performance, and to upskill a team of digitally savvy risk management professionals.
With this in mind, a renewed area of emphasis from Visa is to provide clients with support from its teams of risk experts.
The aim is to enhance payment performance and better manage risk by combining tailored advisory services and the work of Visa’s 1,000-plus dedicated risk specialists to proactively guide, detect and help prevent fraud – both at the network level and the client level.
The range of enterprise solutions available therefore includes Visa Protect Managed Services, a suite of bespoke consulting services, which provide easy and direct access to the organisation’s in-house fraud and risk management expertise.
For example, this could include ad-hoc or ongoing support on an issuer’s authorisations performance with Visa Risk Manager (VRM) Managed Services.
By drawing on experience from across the payments world, analysing an issuer’s ongoing authorisations performance, and benchmarking it with market norms, the Visa team can provide customised advice on how to optimise performance, and suggest new strategies for setting and monitoring VRM rules.
Meanwhile, the Visa Consulting & Analytics (VCA) has a dedicated practice area devoted to risk, which aims to help clients better manage risk and fraud while optimising the customer experience.
Typical service lines include fraud management reviews, authorisation performance reviews, cybersecurity assessments, and enterprise risk management reviews which extend from card payments to general payments ecosystem risk.
Ultimately, says Visa, it’s a combination of AI-enabled technology and analytics and authentic risk management expertise that will enable payment businesses to stay several steps ahead of the threat from fraud.
Download a free copy of “Using AI to Secure the Future of Payments”, the new white paper from Visa.
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