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Today’s Presenters
Jean-Noël Georges, Global Program Director, Frost & SullivanJean-Noel has 15+ years of experience in the fields of corporate strategy, sales optimisation and marketing strategy. He has particular experience in the areas of geographic market expansion, outsourcing business models, online customer experience management, value proposition creation and benefit models.
Mark Goldspink - Chief Executive OfficerMark has spent 25 years in general management roles. After graduating from London University with a PhD, Mark started worked for a multinational oil company in 1988. In 2004 he became Managing Director for Retail Decision’s Global Payments and Fraud Division and in 2010 he moved to Logica Plc (now CGI Inc.) as Vice President responsible for managing Shell’s global outsourced payment contracts. Mark joined The ai Corporation (ai) in 2013.
Frederique Richert, Marketing Manager, GemaltoFrederique is in charge of promoting the Gemalto range of eBanking and eCommerce security solutions to banks, worldwide. Her mission is also to understand the market trends that will shape the future of eBanking and eCommerce security and investigate topics such as layered security, biometrics, frictionless security and flexible authentication
Focus Points
1. What are the main reasons of the increase of card fraud in Europe?
2. Is card fraud categories similar on a regional basis?
3. In Europe, Card Not Present appears as the most used type of card fraud, How can we overpass this threat?
4. Is Dynamic CVV card the best approach?
5. Could emerging and disruptive technologies such as Artificial Intelligence a good answer against payment fraud?
Data Breaches Have Affected Many Organizations and Countries in 2015
Source: Frost & Sullivan analysis, Gemalto
245 Million+Records breached in H1 2015
only
UK4 millions customers records
were breached
+10%Increase in data breaches
compared to H1 2014
Russia20 million files stolen
Japan8 Million+ records stolen in
April this year
TurkeyMore than 65 Million
records stolen
The Recent Global Payment Evolution
Our Top 5 Predictions for 2014 What actually happened – Highlights of 2015
• Globally, the number of payment cards will reach 2,117.8 million units in 2014
• Number of payment cards globally issued in 2014 was 2,050
million units
• Globally the number of DDA card will represent 68% of the total offline authentication type
• Finally, the number of DDA cards represented 75% of the total issued payment cards.
• Fraud payment will continue to raise globally with specific methods on a regional basis
• In 2014, the European Central Bank (ECB) published a report that highlighted fraud trends: €1 in every €2.635 spent on credit and debit cards was lost to fraud
• Fraud methods will be more sophisticated and driven by a strong expertise
• The ECB highlighted the need to follow 5 major recommendations: strong authentication, time out, monitoring, mitigate and provide guidance in order to better protect payment processes against more complex threats.
• Emerging and disruptive technologies such as Artificial Intelligence and Blockchain will massively impact the existing payment ecosystem
• Banks and financial institutions already invested in Artificial
Intelligence to detect and prevent fraud in real time. Blockchain is
under radar for the coming years.
Top Predictions for 2016
Payment cards will reach 2,866.9 million units, growing in double digits.
By 2016, contactless cards will represent globally 47.5% of the total issued payment
cards.
Dual interface payment cards will continue to grow to reach 46.6% of the total issued
payment cards.
New sophisticated threats and fraud will appear in order to overpass existing security
protection.
Disruptive technologies such a Blockchain and Artificial Intelligence will appear as
strong alternatives to create a better level of security protection.
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Facts about the business landscape
Not only do customers have greater choice of payment types, they are accessing goods and services in more
real time ways (omni-channel engagement) - a point of sales (front office) revolution is underway!!!
More payment types via more real time channels is creating more back office complexity.
Therefore to support a seamless customer experience back office tools also need to be real time (automated)
Banks looking for a pay-off from investments made in
digital processes should focus on back office automation
projects and steer clear of multi-channel integration,
according to research from McKinsey.
FINEXTRA, 9th December 2014
Evolution of Fraud Channel MonitoringIncreasing channel complexity
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Machine Learning - Neural Technology: What do we mean?
“Machine learning.. the study of
algorithms that can learn from and make
predictions on data.
Such algorithms operate by building a
model to make data-driven predictions or
decisions”.
The issues have been:
1. Easy of use
2. Speed of modelling
3. Multi Models – more channels now
Genuine vs. Fraudulent Transactions Multi-Model Approach
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mMulti-Model Approach: A New Perspective: Case Study: Multi model neural technology based system
EMV ADOPTION RATE
WW EMV deployment & adoption*
* Figures reported in Q4 2014 and represent the latest statistics from American Express, Discover, JCB, MasterCard, UnionPay, and Visa, as reported by their member institutions globally.
Trends – CNP fraud
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REGIONEMV
CARDSADOPTION
RATE
Canada, Latin America & the Carribbean
544M 59,6%
Asia Pacific 1,676M 25,4%
Africa & the Middle East 116M 50,5%
Europe Zone 1 833M 83,5%
Europe Zone 2 153M 40.4%
E-COMMERCE GROWTH
Evolution of WW eCommerce market
CNP FRAUD INCREASE
11,6%CNP Transactionson the Total Payment Transactionsin France in 2014
66,5%CNP Fraudon the Total Payment Fraud in Francein 2014
CHANGES IN CANADIANCREDIT CARD FRAUD LOSSES
2008 TO 2013 (IN CA$ MILLIONS)
Source: Australia Payments Clearing Association
AUSTRALIA CANADA
Trends – CNP Fraud increase after EMV migration
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SEPA (EUROPE)
FRAUD SHARES AND THE COMPOSITION OF FRAUD FOR DIFFERENT CARD FUNCTIONS(value of fraud as share of value of transaction; percentage)
EVOLUTION OF THE VALUE OF CNP FRAUD AND ITS SHARE OF THE TOTAL VALUE OF FRAUD(EUR millions; percentage)
Who suffers from CNP fraud?
13
Issuing bank Acquiring bankConsumer eMerchant
PAY
Pain of claim resolution,
dispute processing,
impact of card number changeLoss of
confidence
Liable for the cost of fraud if the merchant
has not implemented a liability shifting
protection measure
Bears the cost of claim and chargeback processing
Bears the cost of claim,
chargeback and card re-
issuing processing
Impact on image!
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For Additional Information
Anna Zanchi
Corporate Communications
Digital Transformation
+39.02.4851 6133
Jean-Noël Georges
Global Program Director
Digital Transformation
+33 (0) 4 93 00 61 87
Adrian Drozd
Research Manager
Digital Transformation
+44 (0) 1865 398 699
Ajay Sule
European Sales Director
Digital Transformation
+44 (0) 207 343 8301
