A new white paper from Ondato argues the massive changes we’re seeing in the way people pay need to be matched by changes in the way we authenticate, onboard and verify users.
Failure to do so will lead to an acceleration in the current huge wave of fraud attempts, greater user friction and increased dissatisfaction. If new approaches to KYC aren’t implemented, ultimately there will be an impact on companies’ revenues and profitability.
The new white paper, Open Banking and instant payments need smarter KYC, claims payments are undergoing greater change than at any time in the last 50 years.
As cash use declines, e-payments rise and open banking solutions come to the fore, user expectations of faster, easier onboarding, verification and checkout are growing – however, these expectations are not yet being matched by reality.
E-commerce fraud attempts are soaring
Digital transactions in the form of mobile and e-commerce continue to grow at between 15 and 20% annually according to Shopify[1].
While this is good news, the number of fraud attempts and new fraud types is growing even faster. A recent study from Brighterion predicts[2] a 10% rise in overall fraud losses in 2022 as both the number of e-commerce transactions and the financial value of those transactions grows.
Meanwhile, highly damaging new fraud types such as synthetic fraud and Account Takeover (ATO) grew almost four-fold in 2021 according to chargebacks911[3]. Aware of these challenges, regulators look set to tighten their KYC and AML requirements further.
The challenge is to provide pervasive, secure KYC and AML solutions that confirm customer and counterparty identity without creating more friction for individuals or partner businesses.
After all, more friction can be a disaster – the most recent surveys suggest almost nine in ten consumers would ditch a log-in, checkout[4] or onboarding process that took too long or was too complicated.
The solution: applied intelligence in KYC
To combat rising fraud attempts and protect consumers, regulators are responding with increasingly stringent rules which make the need for rapid and effective KYC and AML solutions greater than before.
Fully digital onboarding, verification and authentication powered by effective AI is the only way to ensure the continued effective operation of your business while keeping user friction to a minimum and meeting growing regulatory demands.
However, the white paper suggests that using a range of unconnected KYC and AML tools will not solve the problem: separate systems do not communicate with each other, leading to information gaps and more human intervention and cost.
At Ondato, we are committed to streamlining and improving KYC and AML-related processes for businesses.
We offer a full set of interlinked, fully-connected tools that employ powerful AI and cover the spectrum of compliance challenges, from new client onboarding to a comprehensive database for ongoing client monitoring. With Ondato, KYC compliance becomes a driver of new revenue growth, rather than a drain on resources.
Download our white paper to find out more about why new payments need a new approach to KYC
[1] See Shopify, 16 February 2022: “Stats and Trends to Watch in 2022”
[2] See Mastercard/Brighterion, Jan 4 2022: “A pandemic-driven increase in 2022”
[3] See chargebacks911, 7 December 2021, “Account Takeover fraud”
[4] See Tink, 18 May 2022: “UK consumers expect seamless payments”
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