Real-time payments pose real-time fraud risk

Financial institutions should prepare for widespread use of real-time payments in the coming months, as well as the resulting security risks, group president of enterprise banking at core provider Computer Services Inc. (CSI) shares in this episode of “The Buzz” podcast. CSI’s Giovanni Mastronardi discusses how the Federal Reserve-backed instant Automated Clearing House (ACH) transactions, along with the prevalence of real-time payment platforms like Venmo and PayPal, will foster innovation for community banks and their customers. “There’s going to be some competition,” Mastronardi tells Bank Automation News. “You're going to have merchants who can do the ACH and might feel better about it. Can I do a real-time ACH for less per transaction than if I take a debit transaction?” Real-time payments will also afford fraudsters the ability to bypass standard security measures, like two-step authentication and “card not present” purchase alerts, he cautions, adding that financial service providers must adapt their security strategies. “As the entire world becomes real-time, no longer is two-factor authentication going to be considered quite as secure,” Mastronardi says. “We're in the process of looking at things like keystroke and mouse tracking. If I'm on my computer, it can tell it's me and not somebody who's taken over for me.” While community banking customers may initially resist added security measures, the end result is a safe and deeply automated experience, he says.