Think of it this way, if you had only one chance to ensure your customer’s money was transferred legitimately to a place that they intended it to go, wouldn’t you want to have a tool or mechanism in place to confirm the transaction is valid before the money leaves that account?
That’s a simplistic way of discussing a much more complex issue, but the truth is with money movement and settlement windows getting shorter and shorter, the opportunity to review transactions for anomalies and fraudulent activity is also shrinking.
A recent ACI-commissioned YouGov survey of 2,074 adults in the UK indicated that 41% expect electronic payments to reach their destination either immediately or in less than 5 minutes. The demands of consumers and businesses to have immediate access to funds has created an imperative that requires financial institutions to perform real-time fraud detection with laser accuracy.
Real-time fraud prevention and detection has been around for some time now. For high volume channels like credit and debit cards, financial institutions have employed real-time fraud prevention tools to primarily focus on the riskiest of transactions, but not the full set of transactions running through the system on a daily basis. With this approach, less risky transactions are monitored in near real-time or batch mode so that the history of transactions can be accounted for and factored into future risk mitigation decision making.
Lower volume higher risk transactions, like commercial wire and ACH payments through the online channel, have normally been treated with all transactions evaluated in real-time. In other words, a real-time decision to let the payment continue on or not is made for every transaction.
The growth in payment options and the desire for consumers and businesses to transact in a faster, more immediate manner requires fraud prevention tactics to keep pace. While some countries are fully immersed in immediate payments initiatives (the UK and Singapore), some of are just embarking on a path (Australia and the US). Regardless of the status of the initiative, real-time fraud prevention should be a primary component in securing payments and commerce in any scenario. The growth in these faster, more immediate-type transactions will require banks and processors to utilize fraud prevention and detection tools that can stand up to high-volume processing.
My colleagues will be discussing the topic of fraud detection and prevention in a real-time world during a series of short sessions on our stand at Sibos. Please click here to view the full schedule and to add them to your calendar.
ACI High Value Real-Time Payments 
