On your marks for SEPA

The European Commission has today published proposals for the setting of end dates for the migration from legacy instruments to SEPA credit transfers and direct debits. It’s taken a while but there has now been a ceremonial bowing to the inevitable.

Full clarity on the subject has still not been achieved but this is indeed a significant step on the road to a full SEPA. And for that, it should be a cause of some celebration.

At least the whole industry knows that serious planning can now no longer be delayed. We don’t yet have the final ‘go’ but we now know we’re under starter’s orders

Paul Styles
Solutions Consultant
ACI Worldwide

The changing nature of fraud

The reduction in fraud levels seen in Australia once again reiterate the potential savings that can be delivered if countries roll out EMV technology, and it will be interesting to see if the current non-EMV countries such as the US reconsider their stance as these stories continue to come through.

However, the rise in CNP fraud in Australia shows how agile the banks have to be to try to stay one step ahead of the fraudster - once one fraud channel becomes more difficult to use or less lucrative for criminals, they soon turn to another, weaker link to steal funds.

CNP fraud, including that perpetrated through online shopping activity, requires banks to use a different set of tools and techniques to identify suspicious activity, such as so called "out of band" communication like SMS messages to communicate with customers, and much more detailed customer and account profiling so that any unusual activity can be flagged as suspicious and assessed in real time to try to identify and prevent fraud at the first attempt.

Dave Divitt
Fraud & Risk Solutions Consultant

Success factors for in-house card processing

I recently posted on the brand, customer and risk-mitigating advantages of bringing card processing in house. However, while an in-house card processing strategy clearly presents a set of indisputable strategic and global business advantages, there are risks to consider.

Banks need to work with their solution provider to establish a deployment strategy group to ensure critical elements of the businesses resources, strategy and IP are addressed, leveraged and protected in the creation and execution of an in-house processing system. Such a group should include key stakeholders, such as line of business, technology, operational and governance leaders.

For those considering implementing an in-house card processing strategy, the top critical system and functionality requirements include:
• Global functionality
• Massively scalable issuing and acquiring capabilities
• Proven security and proactive fraud detection tools
• An open and multi-national platform
• Highly integrated and secure transaction processing.

Banks that take these factors into account when building an integrated, consolidated and global in-house card processing strategy will be armed for success. A brand is a strategic weapon, and a robust, innovative card program is a part of this strategic arsenal.

Lynn Holland
Vice President,Product Management
ACI Worldwide

In-house card processing: reducing risk and costs

I recently posted on how bringing credit card processing in house can help build a financial institution’s brand and customer loyalty. For banks with in-house processing and advanced fraud detection systems, another advantage is the ability to mitigate brand and business risk around privacy and security issues.

Managing risk, compliance and governance directly as opposed to depending on another organization’s security and operational effectiveness is a key factor in many financial institutions’ decision to bring card processing back in house. Being in direct control of all their customer information, banks and financial institutions glean fast visibility into potential and actual threats and can respond rapidly to intrusion and potential data damage.

Additionally, considering many banks have one processor managing prepaid, another handling corporate cards and another perhaps supporting a division as a result of an M&A, the potential for data and intrusion risk exposure can be multiple fold. This issue also brings to light the opportunity for significant cost savings through consolidating and bringing processing under a single, integrated and global in-house system.

Lynn Holland
Vice President Product Management
ACI Worldwide