Sibos 23: the price of speed in payments

Speed is one thing, but in a world of real-time, cross-border payments, it’s just as important for the industry to ensure it maintains user trust.

That’s the view of Luke Perkins, ANZ’s Head of Global Cross-Border Payments Product, who said there are plenty of scammers and fraudsters out to take advantage of any vulnerabilities they can find.

“In terms of the investments we make, to make things faster, cheaper, more efficient - we also need to be investing just as much, if not more, in the security aspects,” he told ANZ Institutional On Air on podcast ahead of the upcoming 2023 Sibos financial services conference.

Speaking with Carolyn Young, ANZ’s Head of PCM, Australia, Perkins said the whole value chain benefits from the advancement of technology around payments, but that comes with a responsibility to keep it safe.

“It would be ignorant of us not to think there are others out there with potentially less-positive ambitions, that could be looking at all those aspects just as much as we are,” he said. “And looking at those as opportunities.”

Perkins said it was critical those transacting through systems like the New Payments Platform (NPP), or the upcoming NPP international payments service (IPS), feel their money is secure and safe.

“And every time we come up with solutions or mitigations to lower the risks, we need be conscious that there's others that are going to be cropping up at the same time,” he said. “I see it as an ongoing investment and ongoing component to making sure that we're not only advancing the ease of transfer of money internationally, but also we're advancing the security of money internationally.”

You can listen to an edited version of the discussion on podcast below.

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Risks

Young said maintaining trust requires an industry-wide approach – and said the financial services sector had been “really trying to pull their weight and add their bit to it.”

“I do have a view that, you know, it does take an industry to really try and create a collective control around this, to make it consistent and provide that certainty,” she said.

“At the end of the day, the channels and vehicles which these activities are driven from often lie well before the bank even gets involved, the institution [only becomes] involved in the payment flow. By the time that value is transmitted, the fraud has been perpetrated. There's a greater view that needs to be taken.”

It’s also important to know about the impact [fraud] controls will have on the ideal user experience, according to Young.

“The reality is much of these checks and balances will potentially create more friction in the process,” she said. “[Safety] does come at a cost of speed, potentially, and ease of use. But those protections are there so that we can give that certainty.”

Perkins agreed, noting a growing focus in international payments are adding “more capabilities to be able to shore up certainty”.

The protections are numerous, including “account name matching, profiling of beneficiaries” and more, he said, which are important tools when sending payments to people that bank elsewhere.

“It's not as easy to pinpoint a customer of another institution, let alone a customer of another institution in another country,” Perkins said. “But those types of investments are very much at the centre of what we're working through at the moment.”

In the end, speed isn’t everything, he said - and customers may find they prefer the security.

“I think the availability, the predictability [of secure systems] are just as, if not more, important” Perkins said.

Flexibility

For international customers sending payments into the Australian market, the security of systems like the NPP IPS is a topic of conversation, Perkins said. The key is allowing users to participate how they feel comfortable.

“As much as we're talking about the flexibility we've been afforded by the design of NPP for cross-border payments, we're also very cognisant [of the risks],” he said.

For Young, the cybersecurity risk is growing, but so is the desire in financial services to “protect information and make sure all parts of the ecosystem are shoring up the right controls to manage these sorts of risks, which are evolving at a rapid pace”.

“At the end of the day, customers want to be able to make payments securely,” she said.

The experts also touched on the recently announced roadmap around regulatory changes to the Australian payments sector, and the upcoming Sibos conference. Listen to the podcast above to find out more.

This is part two of a two-part podcast discussion. You can click here to listen to part one.