As we all know; the world is markedly different today than it was in early March of this year; and one of the things that are seeing first hand is the quickening pace in the usage of real-time payments, where money is digitally deposited into another account instantly. This has accelerated markedly in the face of shutdowns, sheltering in place, working from home and social distancing – in countries across the world.
Here at Aerospike, this has enormous implications for how financial and ecommerce institutions manage and protect their data. So when CeFPro – the Center for Financial Professionals – asked us to share our perspective in an on-demand webinar, how could we refuse?
Our chief strategy officer, Lenley Hensarling, was primed to share best practices and examples of how inflection points like these can lead to innovation systems able to leverage their speed and efficiency to move from the P2P and into the consumer-to-business space.
We were joined in this session by Sam Murrant, a lead analyst at GlobalData Systems: a firm with in-house research capabilities with existing studies on the transition to cashless payment – who was with great interest witnessing these accelerations; market by market across the globe.
COVID-19 Impact on Payment Tools
Sam led off with trend research that showed details of the exceptional growth of alternative payment tools coming into 2020. This mix of payment tools included bank transfer, payment cards and cash and checks vs. fast growing alternatives. One thing of special note is the 68% CAGR growth of the European TARGET Instant Payment Settlement (TIPS) service.
He then shared his firm’s 2020 research around the growth of cash vs other payments tools; showing how the trend lines had been impacted in the first 2 months of the global pandemic and subsequent economic changes.
He then summarized their key impacts, both positive and negative around the subjects of eCommerce, P2P, cashless and instant payments, as well the future of cash. He finished with his firm’s recommended strategies around preventing fraud during this transitional time, with a key takeaway “Security Measures Need to be Smart, Fast and Invisible.”
How the Data Layer Can Stop Fraudsters
Aerospike took up the challenge to show how a platform could be those three things. Lenley shared the thinking behind how a well thought-out system would be able to anticipate and analyze access attempts as genuine vs attacks.
To be able to do this, with the highest level of security but the lowest level of consumer friction, an organization would want to provision a system that provided access to vast volumes of data (millions of transactions; billions of data points and petabytes of historical data.) At the same time, the system should do so promptly (less than 40 milliseconds to confirm identity; less than 100ms to determine potential fraud; completing the requested transaction in mere seconds) to ensure a pleasing customer experience.
To show that this was in fact very possible, our presenter shared use cases from three companies who were providing a delightful, fast and frictionless user experience; Global Payments Leader PayPal, Digital Identity Protection at LexisNexis Risk Solutions | ThreatMetrix; and finally the very successful real-time payments from the aforementioned TIPS system of the European Central Bank.
Fraud Prevention is Both Essential and Possible
The presentation concluded by looking at the key aspects a payments data architecture needs to consider: authentication, authorization, encryption, audit-trail, white listing and granular permissioning. The examples shared were able to achieve all these, and still able to maintain cost-competitiveness and predictable performance at any scale.
While each organization has a unique approach to how they design their systems; we hope that some of these ideas and examples shine a light onto what is possible; and the timeframe when action will show results.
You can watch the presentation upon demand at the link below.