The Federal Reserve Board launched its real-time payment tool, the FedNow Service, in July. Cash transfer applications that make instant payments are active channels for fraudsters, and FedNow will only add to the challenges defenders face.
Fraudsters will figure out the gaps between FedNow, the sending and receiving banks, and the consumer, said Alisdair Faulkner, co-founder and CEO of security and fraud prevention startup Darwinium. Banks, he said, “need to take a holistic view of payments and risk.” They need to “get ahead of the curve and start looking at other markets for compensating controls that have been put in place by other faster payments schemes” and “have full view of deposit behaviors.”
In this episode of CyberEd.io‘s podcast series “Cybersecurity Insights,” Faulkner also discussed:
- Why the consumer is the “weakest link” in a faster payments transaction and why education needs to consist of more than just “beware of scammers”;
- Why banks must find ways to authenticate the intent of a transaction;
- The need for banks to be able to make split-second decisions about a transaction to avoid fraud.
Faulkner is co-founder and former CPO of ThreatMetrix, which was acquired by LexisNexis Risk Solutions for $830 million. He is based in Sydney, Australia, and has more than two decades of experience in the cybersecurity space with a career-long passion for analyzing and preventing financial fraud. Darwinium services large B2C organizations and marketplaces, dedicated payments providers, e-commerce shops, banks and fintechs.