Jonathan Arras’ Post

𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗔𝘂𝘁𝗵𝗼𝗿𝗶𝘁𝘆 (𝗘𝗕𝗔) 𝗽𝘂𝗯𝗹𝗶𝘀𝗵𝗲𝗱 𝗗𝗿𝗮𝗳𝘁 𝗢𝗽𝗶𝗻𝗶𝗼𝗻 𝗼𝗻 𝗻𝗲𝘄 𝘁𝘆𝗽𝗲𝘀 𝗼𝗳 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗳𝗿𝗮𝘂𝗱 𝗮𝗻𝗱 𝗽𝗼𝘀𝘀𝗶𝗯𝗹𝗲 𝗺𝗶𝘁𝗶𝗴𝗮𝗻𝘁𝘀 🔍 The 'Opinion on new types of payment fraud and possible mitigants' discusses the following key points: 1. The European Banking Authority (EBA) has analyzed fraud data for the year 2022 and gained insights into fraud patterns, including new types of fraud such as those associated with instant payments, which have higher fraud rates than traditional credit transfers. 2. Despite the successful implementation of Strong Customer Authentication (SCA), fraudsters have adapted and developed more complex fraud techniques, particularly using social engineering methods. 3. The EBA has provided general comments on the observed fraud trends and suggests possible measures for the EU co-legislators and the Commission to consider. 4. The data and observations presented in the Opinion are based on fraud data collected by the EBA and the European Central Bank (ECB) for 2022, with the exception of data on mail order and telephone order (MOTO) transactions and instant payments, which are based on a separate 2023 survey conducted by the EBA through national competent authorities (NCAs) and national central banks with H1 2022 as the reference period. 5. The EBA has identified specific scenarios in which Payment Service Users (PSUs) or Payment Service Providers (PSPs) can be held liable for fraud, such as when a PSU has made a payment to a fraudster without reasonable grounds for believing in the legitimacy of the payee or when a PSU has disregarded warnings regarding a specific fraud type. 6. The EBA has noted high levels of fraud for certain payment instruments, geographic dimensions, jurisdictions, or combinations thereof, even after the implementation of SCA.    

Fraud in Nigerian Banking: The Shocking Numbers 🫣 I was stunned by reading TechCabal’s article about First Bank’s ₦7 billion fraud incident. The scale of the loss led me to explore the recently released Q2 2024 fraud report—and the findings are even more alarming. 📈 11,532 fraud cases reported in just three months. 💰 ₦56.3 billion involved in fraud, a jaw-dropping 1,784% increase from Q1. 💸 ₦42.6 billion lost, up a staggering 9,000%. The most glaring figure? Losses at bank branches comprised 95.6% of the total, overshadowing fraud via web, POS, or mobile channels. Insider involvement also rose by 23%, raising serious concerns about operational weaknesses. These numbers point to a systemic issue that goes far beyond individual cases, underscoring the urgent need for a coordinated industry response. Here’s where we can start: ✅ Proactive fraud monitoring using real-time AI and machine learning to detect anomalies early. ✅ Stronger internal controls to address the rising insider threats. ✅ Industry collaboration to build frameworks that share best practices and enhance defenses. This isn’t just about compliance; it’s about rebuilding trust. Nigerian banks now have an opportunity to turn these challenges into a foundation for a more secure and resilient financial ecosystem. What steps do you think are most critical to address these issues? Let’s discuss. 👇

The European Banking Authority (EBA) published today an Opinion, in which it assesses payment fraud data. The document supports the new security provisions in the upcoming PSD3/PSR legislative framework, advocating for further measures like the mandatory IBAN/Name checks and enhanced fraud monitoring requirements. It emphasizes the need for a balanced approach that protects consumers while holding PSPs accountable for security lapses.   Emerging Types of Payment Fraud: - Instant Payments: High fraud rates compared to traditional credit transfers, partly due to the limited opportunity for PSPs to recover funds post-transaction due to rapid execution times. - Cross-Border Transactions: Significantly higher fraud rates than domestic transactions, attributed to inadequate cross-border cooperation and inconsistent application of SCA. - Authorized Push Payment Fraud: Increasing instances where payers are manipulated into authorizing payments to fraudsters, typically through social engineering techniques. Recommended Security Measures: - Enhanced Authentication: Strengthened procedures for transaction authentication and monitoring, including real-time transaction monitoring for instant payments. - IBAN/Name Checks: Expanded use, especially in cross-border transactions to verify the match between recipient names and account numbers. - Fraud Risk Management Frameworks: PSPs should establish comprehensive frameworks to assess and manage fraud risks actively. - Amended Liability Rules: Clearer definitions between authorized and unauthorized transactions to ensure payers are not unduly penalized for fraud, especially in social engineering cases. - Unified Supervision and Data Sharing: Improved cooperation and data sharing among PSPs across the EU to enhance detection and prevention capabilities. 📖 https://europa.eu/!WqKTVN

The European Banking Authority (EBA) has unveiled a comprehensive opinion on emerging fraud trends and new #fraud types. 🕵♂️ As to the emerging fraud types, the EBA has observed that fraudsters have started to adapt their techniques to the changing technological and regulatory context. As #SCA has been successful in preventing fraud types based on the stealing of customers’ credentials, new, more complex fraud types emerged or became more widespread in recent years. These new fraud techniques can be separated into three categories: manipulation of the payer, social engineering and technical scam, and enrollment process compromise. To try and mitigate the evolving fraud landscape, the EBA has proposed additional security measures to ensure a robust and future-proof framework for preventing payment fraud in the EU, under the discussion of the #PSD3 / #PSR proposals.

🔒 **Protection Against Payment Fraud: New Measures Proposed by EBA** The European Banking Authority (EBA) has recently assessed data on payment fraud, identifying new types and patterns of fraud, and proposing measures to mitigate them. This evaluation aims to strengthen the future legislative framework, particularly within the scope of the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR), to protect consumers from potential losses due to fraud. Regulatory measures such as Strong Customer Authentication (SCA) mandated by the revised Payment Services Directive (PSD2) and EBA's technical standards have significantly reduced fraud related to customer credential theft. However, fraudsters have adapted their techniques, employing more sophisticated frauds, such as those based on social engineering. To counter these new forms of fraud, EBA proposes new security measures in addition to the European Commission's proposals for PSD3 and PSR, as well as provisions recently enacted through the Instant Payment Regulation (IPR). For more information, refer to the official source: [European Banking Authority](https://lnkd.in/eHpe3PkE) #PaymentFraud #FinancialSecurity #ConsumerProtection #EBA #IPR #PSD3 #PSR #SCA

📢 **Joint Report on Payment Fraud: ECB and EBA** 📅 **Date:** 01/08/2024 💶 **Fraud in 2022:** €4.3 billion 💶 **Fraud in H1 2023:** €2.0 billion 🔒 **Strong Customer Authentication (SCA) effective against fraud!** The joint report by the European Central Bank (ECB) and the European Banking Authority (EBA) highlights the fraud data reported by payment service providers in the European Economic Area (EEA). 🔹 **Most Affected Payment Instruments:** - **Bank transfers** - **Card payments** (majority in volume) 🔹 **Fraud Rates in H1 2023:** - **Card payments:** 0.031% of total value, 0.015% in volume - **Electronic money transactions:** 0.022% in value, 0.012% in volume - **Bank transfers:** 0.001% in value, 0.003% in volume 🔹 **Impact of SCA:** - Transactions authenticated by SCA show lower fraud rates, especially for card payments. - Fraud rates are ten times higher for transactions outside the EEA. 🔹 **Distribution of Fraud Losses (H1 2023):** - **Card payments:** 71% of losses involve cross-border transactions. - **Bank transfers:** 43% of losses. - **Direct debits:** 47% of losses. 🔹 **SCA Exemptions and Impact on Fraud:** Certain exemptions (e.g., low value, trusted beneficiaries) show higher fraud rates than others (e.g., secure corporate processes). 🔹 **Distribution of Responsibility for Losses:** - **Users of payment services:** 45% of losses for card payments, 51% for cash withdrawals, over 80% for bank transfers. The report emphasizes the importance of remaining vigilant against fraud and the crucial role of strong authentication. The widespread adoption of RTS standards for SCA has had a positive effect on reducing fraudulent payments. 📍 **Full Source:** [ECB Press Release](https://lnkd.in/eXzf8XfM) 📊 **#Fraud #PaymentSecurity #ECB #EBA #SCA #PSD2 #CyberSecurity**

Some nuggets from the recent EBA & ECB report on payment fraud across Europe: 🔐 SCA has been a force for good and is effective at preventing fraud 💳 card payments have by far the highest fraud rates both in value and volume: 📈 0.031% in H1 2023, increasing from 0.026% in H1 2022 or 7.31 million fraudulent transactions out of a total of 48.77 bn total card payments 📱 credit transfer fraud rate by comparison is significantly lower at 0.003% (or 616k fraudulent transfers out of total of 21.81 bn) 💰 credit transfers are often used for high-value payments (AOV €6485), which means that the average value of of a fraudulent credit transfer is higher for credit transfers vs other types of payments, but still significantly lower than the AOV, at €1835 #payments #fraud #cardpayments #report #openbanking https://lnkd.in/dwFMUKUe

Important Insights from the Latest EBA & ECB Payment Data Report. The joint report from the EBA and ECB highlights key findings on payment trends and fraud for H1 2022, H2 2022, and H1 2023. Here are the key takeaways: 🔍 Scope & Coverage: - Analysed data on credit transfers, direct debits, card payments, cash withdrawals, and e-money transactions across all EU/EEA countries. - Focused on total payment transactions and fraudulent transactions in value and volume. 💰 Fraud Analysis: - Total payment fraud in 2022: EUR 4.3 billion; H1 2023: EUR 2.0 billion. - Major fraud types: Credit transfers and card payments. - H1 2023: EUR 1.131 billion in fraudulent credit transfers; EUR 633 million in card fraud. 📊 Fraud Rates: - The highest fraud rates were observed in card payments (0.031% value, 0.015% volume) and e-money transactions (0.022% value, 0.012% volume). - Lower fraud rates in direct debits, cash withdrawals, and other instruments. 💳 Card Fraud Insights: - Predominantly remote transactions. - Main causes: Lost/stolen cards and card details theft. - SCA has a significant impact, especially within the EEA. 🌍 Geographical Insights: - Most transactions were domestic, but cross-border fraud was significant, especially outside the EEA. 🔐 Security Measures: - SCA shows a positive impact, with lower fraud rates for authenticated transactions. - Higher fraud rates observed for transactions using SCA exemptions. 📈 Liability & Loss Distribution: - Varies by payment instrument and country. - PSUs bore significant losses, especially in credit transfers and card payments. 📉 Outlook: - Stable fraud trends due to SCA and other industry measures. - Continuous monitoring by EBA and ECB to enhance payment security. #Payments #Fraud #FraudPrevention #Fintech #EBA #ECB #PSD2 #SCA #PaymentSecurity https://lnkd.in/dnrnDX2t

🚨 Shedding Light on Internal Banking Fraud Across Globe🚨 Join me as I delve into an in-depth analysis of Internal Banking Fraud with our latest presentation. 🏦 Key Highlights: 🔍 Quantum of Frauds Occurring: The magnitude of internal banking fraud is staggering, with recent reports showing a significant increase in such cases worldwide. From 2022 data alone, over 2,110 cases were recorded globally, amounting to losses over $3.6 billion. In India, frauds have surged, from ₹2,038 crore in 2009-10 to ₹8,646 crore by 2012-13. 🕵️♂️ Real-Time Fraud Cases: 2023 Nigerian Bank Fraud: A real-time fraud detection system flagged and prevented an employee from transferring funds from dormant accounts to personal accounts. Nigerian banks are investing heavily in this technology due to rising internal fraud cases. U.S. Zelle Fraud Prevention: U.S. banks have implemented real-time monitoring for transactions on platforms like Zelle, which has seen increased fraud cases. This system flags unusual transaction patterns, such as multiple high-value transfers, helping banks quickly prevent or reverse fraudulent transfers. Australia's Anti-Fraud Network: Australian banks have deployed real-time fraud detection to combat internal and external fraud. Recently, this system detected a high-value unauthorized transaction and halted it within seconds, preventing significant loss. Would thank my Fintech Mentor Perumal Jayakumar on behalf of me and my team of Rashid Ali, Neha Rai and Sanjana Bansal for motivating us to dive deep into Fintech and emerging new Financial frauds from it. Happy Learning! #Banking #FraudPrevention #CyberSecurity #FinancialIntegrity #AI #MachineLearning