As digital transformation continues to proliferate, financial services players, such as banks and financial institutions, would be wise to look to key technology providers in the industry, in helping them navigate these potentially challenging new territories. We interviewed Nicolas Muhadri, CEO StreamMind, a hight-tech company providing secure interbank transactional messaging, instant payments, verification and fraud prevention, to discuss his thoughts on the recent fraud issues in the industry:
“Fraud, being one of the major security implications of digital innovation, is becoming an increasing issue for the financial services industry. Bank transfer fraud, in particular, has entered the media spotlight during the past couple of years.[i] Victims have lost vast amounts of their personal savings through such schemes, with little to no legal backing when it comes to claiming damages for their losses.
At StreamMind, we have been working on solutions for erroneous transactions taking place online. Our anti-fraud solution, Lucy, is the first of its kind, as it allows enterprises to check, in seconds, that the bank details of their suppliers match the name of who they’re paying.
Bank transfer fraud relies on the switching of bank details of named suppliers, to their own account, which is incredibly different to detect as there is no way to validate that the name matches the bank account, without additional overlaying software.
Previously, companies have incurred huge financial losses, with no reimbursement available, as there is no legislation to support a fraud claim if you were to issue the payment to the wrong individual – you are considered liable for the error.
With our network of hundreds of banks, we can now offer a secure solution to enterprises and banks for all types of transactions – national, international and interbank. We already have the technology in place, and we have built the software to connect banks and customers.
StreamMind is also the software editor of MoneyRoad, the new Digital payments app, which is compliant to the Single Euro Payments Area, the new industry standard format for cross-border European bank transfers. It is available on tablet and mobile, on the web, as an API, and is also completely customisable.”
With new data released from banking trade body, UK Finance, it has been revealed that incidents of authorised ‘push’ payment scams reached 84,624 in 2018, with total losses of £354.3 million. It was also revealed that in the second half of 2018, £209m was lost in bank transfer fraud, compared to the £145m lost in the first half of the year.
Banks are clubbing together to respond to this challenge: in February this year, several of the leading industry banks signed up to a new code involving a reimbursement scheme, showing further interest to this area, and following the super-complaint made by Which? in 2016, ‘Consumer safeguards in the market for push payments'.
Why has transfer fraud increased?
In 2018, there were a significant number of high-profile data breaches, which resulted in large amounts of consumer data being compromised.
Data collected through fraudulent means can be used many years after the event has taken place, and can be used to facilitate deception scams against small companies and consumers, making them highly convincing and far more difficult to guard against.
“The fact is that criminals are becoming smarter, so we [technology players] and the banks, retail players, and so on, combined, need to become even smarter, as a result.
The increased use of data has led to an increase in scams fueled by an authenticity and accuracy that just wasn’t there before.
Criminals can use personal and financial data to defraud customers and trick them into thinking the request is genuine, by posing as HMRC, or DVLA, or impersonating a banking site - all with access to their personal data to further validate their claims.”
StreamMind are currently working with the largest banks across France, and, as they are already classed as a leader in this arena in France, they are well-versed to offer first-rate solutions for the European sector as whole:
“We are leading in the market and expanding globally. Europe is the first area to target on our roadmap, and the beauty of our product is that it’s already succeeding in a European territory, and therefore our clients know it is ready to roll out into other European countries as it has been tested and proven to work.
We are really looking forward to discussing our proposition in more detail at Money20/20 this year, and meeting with banks, financial institutions and enterprises to show them how they can avoid fraud easily, and in seconds, with our solution, Lucy.”
Managing the fraud risk with StreamMind’s ‘Lucy’
“Our mission is to empower any enterprise with the tools to adapt to the demands of digital transformation securely. Typically, innovation isn’t considered synonymous with security in our industry, and that’s a stigma we really want to challenge. We believe the two can come hand in hand, and they have to in order to guard against the fraud issue effectively.
We’re certain we can help with many aspects of the fraud dynamic faced by banks and financial institutions – particularly in long-distance payments, which account for 73% of fraudulent payments.
As we already partner with several hundred of the largest banks, who are already connected to our technology, we see our solution being as secure and effective for international payments, as for domestic transactions.”
StreamMind is currently a leading high-tech player in France, and was established in 2008. The company specialises in transactional and messaging software solutions, with the aim of building software solutions that provide both robust and agile, as well as, simple, adaptable and scalable solutions for enterprises.
Their TIME™ technology is the product of ten years of research and development. StreamMind built also the first interbank network totally opened and highly secured in cooperation with the major French banks (Caisse d’Epargne, Crédit Mutuel, CIC, Crédit Agricole, BNP, and Société Générale) and several leaders in the information technology sector (SUN Microsystems, HP and IBM).
[i] Where the victim initiates the transaction from their own bank account, having been tricked by the scammer through a deception scam.