Tomer Barel, Chief Risk Officer for PayPal, has five predictions for how fraud will evolve in 2016. None will bring a smile to your face, but one in particular is bad news for telcos:
As mobile shopping continues to gain popularity with consumers, fraudsters will be sure to up their mobile targets in 2016. Using standard, off-the-shelf capabilities for mobile will fall short. Success in fighting fraud on the mobile platform will depend on how we make innovative use of the unique data and capabilities that the mobile platform creates – from location information to unique IDs.
This should be particularly alarming for mobile comms providers because of the recurring dissonance in customer expectations, where they use their phone to pay other companies for things they want, but habitually complain to the telco whenever anything related to their phone goes wrong. In addition, the desire to avoid becoming a ‘dumb bitpipe’ has drawbacks as well as benefits; it is easier for a dumb bitpipe provider to insist they have no responsibility for what is on the customer’s phone or what has been communicated to it. Whether they want to or not, telcos will have to take increasing responsibility for shielding their customers from fraud, even if some of the fraud is due to the poor security habits of those customers.
Barel’s other predictions also make interesting reading.
- Gathering data from social networks will make it easier for fraudsters to trick others into revealing personal information.
- The use of mobile phones and NFC to perform financial transactions means the companies processing them will be at greater risk because they will have gathered less data on who the customer is.
- Advanced machine learning will help human detectives to sift through data and spot the hallmarks of fraud, sometimes predicting it before it occurs.
- Tighter collaboration with regulators will lead to a better definition of what businesses are allowed to do with data, and make it easier for customers to validate their identity.
Barel’s article was written for CNBC and can be found here.