PSD2 Rewards Banks That Innovate And Step Up Security
The countdown toward mandatory PSD2 implementation has given rise to trepidation in the banking sphere, and while much remains unknown about how the revised Payment Services Directive will truly impact the industry when it comes into effect this month, experts seem to agree on one thing: Banks that embrace the possibilities that come along with the modernization have a much higher potential to thrive than banks that stand still and unchanging in the storm.
One of the main goals of PSD2 is to create open banking: standardized access to customer data lowers the barriers for third party providers (TPP) and financial technology companies (FinTechs), meaning banking competition rises and new forms of banks and banking habits could emerge. While this is obviously a good thing for new players, it has the potential to be quite disruptive for legacy banks — unless they use PSD2 as a spark to design more convenient and — just as important — safe and secure products and services.
A study done by Accenture shows that half (50%) of all bank executives — and nearly two-thirds (63%) of those in Europe — believe that implementing Open Banking will increase the level of risk in the banking industry, leading to potential security and fraud vulnerabilities.
Eliminate Security Concerns To Stay In The Race
Banking executives aren’t the only ones worried about security in this ever-changing financial world that includes PSD2. Consumers are also concerned with the safety and security of their information, and companies that prioritize keeping their customers’ data safe will win.
A 2016 study done in Germany by Strategy & found that only 32% of people use non-payment digital service apps provided by their bank. And concern over security is the primary reason listed for the low adoption of this kind of service. In fact, 34% of respondents who are not using financial apps reported that they would “certainly” or “likely” adopt them if security concerns were eliminated.
Meanwhile, a whopping 88% of people in the survey use third-party digital payment services like PayPal and Sofort, with 85% of the respondents rating the security of these payment services “high” or “very high” and 82% reporting that they “agree” or “strongly” agree that such companies can handle cash transfers as reliably and safely as their banks.
In essence, safety and fraud prevention matter to consumers now and will continue to be a priority as PSD2 gets underway. RISK IDENT offers fraud prevention software including mobile SDK to banks as they navigate the choppy waters the revised Payment Services Directive creates. And they’re strong contenders as they’re powered by a combination of rule sets and machine learning.
Self-developed by a team of expert data scientists and engineers, RISK IDENT’s anti-fraud software includes sophisticated device fingerprinting and the most up-to-date artificial intelligence technology in the fraud prevention sphere. It’s all designed to keep the user experience smooth and friction-free. And it’s this mixture of improved fraud prevention and customer convenience that will keep banks thriving in the rapidly changing financial environment. What’s more, because RISK IDENT’s machine learning fraud prevention solutions are flexible and self-evolving, they adapt and will stay viable no matter what changes are in store for the future of finance.
To learn more about how RISK IDENT can help banks navigate the changes brought about by this year’s PSD2 implementation, please contact us at: email@example.com. Additionally, attendees of the upcoming Payment Exchange in Berlin, being sponsored by RISK IDENT on January 25 and 26, can meet us in person for more information, and attendees of the Merchant Payments Ecosystem in Berlin on February 20 through 22 can stop by our booth (#PO7) to learn more, as well.
Attendees of the MPE event can also look forward to a speech by RISK IDENT’s Senior Consultant for fraud prevention solutions, Dirk Mayer, titled “Fraud Goes Mobile: From Lambs and Wolves.” The presentation will take place during the Checkout & Conversion Session 1: “New Approaches in Fraud Detection and Prevention” in the Pavilion room on Wednesday, February 21.