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KYC Isn’t Enough in the Digital Age of Card Issuing

In a recent podcast with PYMNTS, i2c’s Nathan Wu-Falkenborg, vice president of global strategy and analytics, spoke on the topic of fraud in emerging payment technologies like virtual cards, digital issuing, and buy now pay later (BNPL) features.

Based on real-world data, he mentioned that criminals aren’t necessarily compromising new payment options and emerging financial technology. Instead, criminals are using identity theft/fraud and then use these new payment solutions as a vehicle.

As a result, companies who want to get serious about mitigating fraud risk should focus on two key areas:

  1. Identity verification in transactions: This is where FIs are collaborating with the customer and other stakeholders to confirm the voracity of the transaction. For example, 3DS transactions where the merchant is providing information, the cardholder is engaged, and the issuer [processor] can make the smartest decision based on all of the information available within the transaction.
  2. Identity authentication at origination: This is the commonly accepted method(s) of know your customer (KYC). But FIs who use this method of identity verification in origination as a standalone, aren’t doing everything they should be doing to mitigate identity fraud risks.

In this podcast, Wu-Falkenborg goes into additional details about using behavioral biometrics, configurable fraud rules, and other advanced technologies to effectively manage fraud risks—all in conjunction with the critical role that humans should play to supplement technology.

Be sure to listen to the full podcast below!

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About Author

As Vice President of Global Strategy & Analytics, Nathan Wu-Falkenborg is responsible for fraud risk management, program management, dispute operations and analytics services. His 20 years of payments experience in senior positions span across product management, consulting, analytics, and business intelligence. Nathan has worked for Visa, HSBC, GE and fintechs in the US, across Asia and the Middle East. He’s built and led high-performing business units powered to drive deep consumer insights and create value. Prior to joining i2c, Nathan served in a variety of senior roles pertaining to global analytics and strategy, developed novel solutions that reduce fraud, increased the use of transaction data, and established methods that turn data into relevant and consumable insights to help inform decision making, identify opportunities, and cultivate a measurement focused culture. Most notably, Nathan lived in Singapore for 6 years and served as the Head of Analytics for Visa across Asia Pacific, Central Europe, Middle East and Africa, where he built and operated the high-performing analytics unit in Singapore and Dubai. Under his leadership, the team developed powerful and flexible analytical capabilities that drive deep consumer insights and empower clients to serve their customers better.