Survey Reveals Pessimistic Payments Fraud Outlook
A NACHA conference survey finds 84% of payments professionals expect fraud to increase very soon.
The vast majority of payments industry professionals believe payments fraud is going to get worse – and soon, according to a new survey released this week by TD Bank.
The survey of professionals at financial and technology services organizations during the 2018 NACHA – The Electronic Payments Association conference in May found that 84% believed payments fraud will become a bigger threat in the next one to two years. That’s actually down from the 91% who said the same in 2017.
“This drop could indicate that companies are gaining confidence as they prioritize and invest greater resources in cybersecurity prevention and preparedness,” the report said. “Further supporting this idea, 9% of respondents noted that cybersecurity software will have the greatest positive impact on the payments industry over the next three to five years, potentially indicating that payments professionals may finally be seeing some positive developments in the area of cybersecurity.”
The survey also showed that finance and treasury professionals believe integrating real-time payments with online banking is the technological innovation that will have the greatest positive impact on the industry over the next three to five years.
However, 36% of the respondents said companies and smaller financial institutions need to update their legacy systems to support digital payments.
“With improved technology comes the need to revamp outdated frameworks. Respondents were not shy to call out the need to refresh internal infrastructure systems as the main roadblock to success in implementing digital payments strategies,” the report said.
In addition, the survey data suggested tech-savvy financial institutions could capitalize on a significant opportunity if they can find a way to provide mobile offerings to businesses. Almost three-quarters of the respondents (74%) said integrating a mobile application for business banking would improve a company’s experience with its financial institution.
“One of the largest impediments to today’s payments industry is that change is happening faster than organizations can realistically accommodate it. Sending and receiving corporate payments is a complex process and one that is not yet as nimble as consumer payments,” TD Bank Head of Corporate Products and Services Rick Burke said. “As more CFOs and treasurers use immediate payment schemes in their personal financial transactions, the demand for commercial availability will also rise, and financial institutions and businesses need to be prepared to accommodate that expectation.”
The survey also found 20% believed artificial intelligence and machine learning will create positive change in the industry; only 11% said the same about blockchain. Just 4% said biometrics would create positive change.
According to the report, a full 64% of respondents also said they did not view cryptocurrencies as a legitimate form of digital payment. However, the data suggested the topic is not high on the list of things payments professionals are worrying about right now: Just 4% said the controversy around cryptocurrencies is the biggest challenge in payments innovation.