Payments Blog • 5 MIN READ

Innovating Safely: Staying Ahead of the Competition (and Fraudsters)

John Dunne

Written by John Dunne

John Dunne, Chief Solutions Officer at IR shares his thoughts on the fine line of innovating safely. FinTech is all about innovation, but how can your organization innovate without opening the doors to fraudsters?

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Scott: Striking the delicate balance between safety and innovation. It isn't easy. John Dunne, Vice President of Products at IR joins us. John, what's a smart strategy when it comes to our desire to increase margins?

John: Well, the challenge with the one in a hundred gamble is you need to innovate to stay ahead of the competition and to grow your marketshare. And, in an established market, it becomes a game of percentage points. Each percentage point can be worth millions or billions of dollars. And the challenge with innovating in payments is that you might be about to unleash a new capability that is going to grab you marketshare, but are you going to be releasing something that potentially raises your fraud profile and put your regular business at risk? And so there's a number of examples that we could probably go through, but one of the ones that I like to touch on is the number of articles I've seen just about how electronic wallets are suffering from really a social attack where people will phone the bank, say hey I've got my card, I'm trying to register it on my device and by impersonating the cardholder, they will have put a stolen card on their device and then go forward making what to the payment system looks like legitimate payments, but we've rolled out a new innovation, a new process that's exposed a fraud potential that can have potential downsides of putting our regular business at risk.

Scott: Is there such a thing as safe innovation?

John: Yeah.

Scott: Because, when you consider innovation, you're wanting to be cutting edge, you're wanting to be quick, wanting to be first, which is something we'll talk about here in the future, but you know, but you're talking about safety needs to be a primary concern, so how would you define or how do you get to safe innovation?

John: You know, I think there's been a big shift in maybe the last two or three years of thinking in that it was certainly a case of you would innovate and then you would think about security. And really today it is a security first innovation. And if I look at some of the more recent innovations in payments, it is about putting security first and making sure that security in itself can be an innovative way for an issuer or an institution to differentiate themselves. Your money, your transactions are secure, safe, private. So, I think that is a big shift that we're seeing, and it's going to continue as peer to peer payments take place through mobile to mobile devices. And it's certainly a key point of the e-merchants that are out there. And you know, every time I purchase things from or and they've got my cards on file, I need to have confidence that my credit card information is secure before I'm going to hand that over.

Scott: Can you think of any unnecessary gambles or situations where people are still so quick to innovate that they do take unnecessary risk or they do have some unnecessary gambles in terms of their exposure to fraud and things of that nature?

John: To give an example, I might pick on the e-tailers for a moment. And this was an issue historically, but it's been in the headlines on and off over the years. But years ago, Amazon invented the one-click purchase. I could see an item and I could click it. And it knew my billing address, it knew my credit card details, and all this information was stored inside Amazon. And we saw from there a whole range of retailers that would go out there and want to store my credit card information. And that's a great innovation, it makes it really easy for me to purchase and do business with them. But at the same time, that's changing the risk profile for me personally, the institution, and potentially that organization themselves as they're now holding credit card numbers. And, it's about, you know, that's a really good example of where a great feature was added. And, you can go back through the headlines of the last five to ten years and see despite all the improvements in technology, the number of credit card details that have been stolen from retailers that store them is just tremendous. And so, it would seem that if you wanted to steal credit card details, don't worry about hacking a bank, go hack someone who stores them. And, I think that's just an example of going forward, you know, when people start saying okay, I want to put my credit card on a mobile device, they're now hesitant. Well, what if I lose my device? I lose my device more often than I lose So, I want to make sure that information is secure and I'm in control of it.

Scott: You can't afford to be complacent when it comes to your company's security. Visit to learn how Prognosis can help. Proactive performance management solutions.

Topics: Payments

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