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An article relating to this blog post on Finextra:

Faster Payments stalls among non-clearing banks

The UK's Faster Payments service has had a successful start among the founding clearing banks since its launch last May but adoption of the system by other financial institutions has been disappointin...


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Banks take fraud seriously

I feel I have to stand up for the banks when it comes to the fraud concerns of Faster Payments. True, some banks have implemented temporary solutions to manage fraud resulting from Faster Payments, but it is essential that people don’t misunderstand ‘temporary’ to mean ‘inadequate’.

Banks have to review their fraud prevention tools and processes on an ongoing basis, and regularly make changes to keep up with changing technology and changing fraud trends, and the UK banks are very experienced and capable of doing this. The banks that have gone live with Faster Payments were prepared for the changing nature of the fraud they would face, and made sure that they and their customers would be protected when it went live.

A good fraud prevention system is never permanent, it evolves and changes all the time. As the world around it changes, for example with chip and PIN, online banking, Faster Payments, SEPA or mobile banking, banks will expand their fraud strategies to encompass new channels and trends. That is one of the reasons we are seeing such a move towards real-time and enterprise fraud systems as banks combine information from many different sources to ensure they are as accurate as possible when preventing fraud.

Ultimately, it is the banks that are liable for fraud, not the consumer – so it is in their benefit to make sure their systems are as secure as possible.

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Comments: (4)

Peter Bove
Peter Bove - Aviso - London 23 January, 2009, 07:56Be the first to give this comment the thumbs up 0 likes

Interesting view, but my experience is that banks focus on fixing existing fraud issues rather than putting in place barriers to prevent fraud from happening in the first place.  It is always difficult to justify spending money to fix a problem that has yet to be quantified when there are measurable losses that can be opposed.

I'm not aware that the banks did much in advance of Faster Payments other than to try and fix the internet banking fraud problems from which they were already suffering.

David Divitt
David Divitt - VocaLink - London 26 January, 2009, 12:17Be the first to give this comment the thumbs up 0 likes

There is definitely a catch up game that, by the nature of the fraud world, is always being played by banks.  I, however, think in terms of Faster Payments, there was experiential knowledge gathered, by the banks, from places that have gone through a "faster payments" shift in the past.  They knew that any current vulnerability would be exploited further and took the first steps by securing them.  It is unfortunate that in many cases there has to be enough loss to warrant the investment in prevention but, in this case, I think many banks did try to pre-empt the problems.

Peter Bove
Peter Bove - Aviso - London 27 January, 2009, 09:07Be the first to give this comment the thumbs up 0 likes

Interesting, but I can only reiterate that this wasn't my experience when discussing the topic with banks prior to go-live. 

A Finextra member
A Finextra member 27 January, 2009, 10:12Be the first to give this comment the thumbs up 0 likes

Certainly in some cases banks are reviewing their fraud prevention offerings regards FP- specifically through the more obvious channels.

FastPayments.co.uk surveyed a wide range of banks / building societies (both clearing and agency) and found that despite the  "completed flags' being raised either the solutions were temporary / security measure were temporary- or indeed both the processing solution and the security / fraud prevention systems were temporary.

2009 will be the big year in developing the proposition in terms of what is tangible to the customer. We have a number of key FP players watching our blog on linked in- feel free to add your names to the list and discuss this further if you have not already?

Kind regards,

Nick

Nick Blackwell, FastPayments.co.uk

 

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