npp Archives

Fraud and AI: what you need to know

Posted on November 27, 2017February 1, 2024 by Uberbrand

Artificial Intelligence (AI) is already having a significant impact on the way we do business today. From helpful chat bots guiding us through complex purchase journeys to detecting potentially fraudulent payments, AI has the potential to create seamless customer experiences while simultaneously processing large amounts of information.

Machine learning frees humans from the grunt work of data tracking and pattern analysis – it’s faster, more scalable and learns from past information. No wonder Gartner predicts that more than 40% of data science tasks will be automated by 2020.

So when it comes to balancing customer demand for real-time payments with secure fraud-mitigating authentication, AI is an effective enabling tool for fraud teams to focus their investigation skills in the best place to securely ensure the speed and rigour required for a real-time payment. And that’s why more organisations are exploring the use of AI, especially in the area of fraud.

What role could AI play in fraud prevention and detection?

Through machine learning, the complexity of big data really becomes useful. At Cuscal, we have partnered with Feedzai to provide an advanced risk management platform that will be core to protecting Cuscal clients from the evolving threat of fraud.

“When using Feedzai, banks have significantly improved fraud detection, reduced false positives and overall a better customer experience – outperforming leading non-AI solutions – that’s why banks like Citi and Capital One have backed Feedzai’s technology.” said Richard Harris, SVP Sales International from Feedzai.”

With so many more payment channels available – online, mobile, P2P – there are more points of vulnerability. More than ever, we need a complete view of customer activity across products, an integration of channels to improve the customer experience, and to make more data-backed business decisions.

How will AI strengthen existing fraud protection systems?

With AI’s ability to analyse complex data in real time, fraud teams are better equipped to predict fraud before it occurs and so minimise losses. AI reduces some of the noise of large amounts of data to focus on the real threats. As we prepare to launch the New Payments Platform (NPP) in Australia, we can expect to see digital transaction processing converge with analytics providing better insights. Machine learning will enable organisations to look at more data, from more sources, and make better predictions with less uncertainty.

Of course, bots could be working on both sides – and the next generation of AI-enabled fraud systems will also need to be prepared to tackle new and increasingly sophisticated fraud attempts and scams.

Every Australian financial institution connecting to the New Payments Platform (NPP) needs to consider their real-time fraud monitoring and ensure effective controls are in place. AI is likely to underpin best practice – checking every transaction in real time for anomalies and flagging suspicious activity for action by experienced fraud investigation teams.

Learn more about preventing fraud in a real-time world.

Fraud prevention: then and now

Learn more about preventing fraud in a real-time world.

By Michelle Trundle, Senior Manager, Fraud

Cuscal connecting over 50% of FIs to NPP

Posted on October 26, 2017October 27, 2023 by Uberbrand

Sydney, 26 October, 2017 – Today, the New Payments Platform (NPP) took an important step closer to an early 2018 launch as we passed a major checkpoint on the road to going live.

Each of the 13 shareholders of the NPP Australia Ltd has revealed which banks, credit unions and building societies they would be bringing live on Day 1. 29 financial institutions covering 39 retail banking brands will be connecting to the NPP from Day 1 via Cuscal – more than 50% of the total number.

Robert Bell (General Manager, Products and Service), said:

“Today is a significant milestone for Cuscal and our clients. Building the NPP infrastructure and then connecting to it has been a large and complex undertaking for everyone involved, no matter how big they are, so to pass these milestones is cause for celebration. We are very proud to be connecting such a large percentage of all financial institutions. It’s a real credit to the fantastic work of our Cuscal NPP Team and their counterparts at our clients and their core banking system providers.

“It demonstrates that large, medium and small financial institutions can all have access to the latest and greatest payment technology. Some of our clients connecting to the NPP have millions of customers and others have thousands, but all of them will be able to make and receive payments in real-time from the first day the NPP is publicly available.”

The list of financial institution brands connecting to the NPP via Cuscal at launch includes:

Bank Australia, Beyond Bank Australia, Big Sky Building Society, Australian Unity, Central Murray Credit Union, Catalyst Money, Illawarra Credit Union, Community First Credit Union, Easy Street Financial Services, Northern Beaches Credit Union, CUA, Credit Union SA, Defence Bank, First Option Credit Union, Ford Co-operative Credit Society, Goulburn Murray Credit Union, MyState, The Rock, Nexus Mutual, Orange Credit Union, P&N Bank, People’s Choice Credit Union, Police Bank, Police Credit Union, RACQ Bank, Comtax Credit Union, Security Credit Union, SCU, Select Encompass Credit Union, South West Credit, Firefighters Mutual Bank, Teachers Mutual Bank, UniBank, The Mac, Bankstown City Unity Bank, Reliance Bank, Unity Bank, Warwick Credit Union, WAW Credit Union.

Media contact
Jake Waddell jwaddell@cuscal.com.au 0417 312 902

Preventing fraud in a real-time world

Posted on October 25, 2017February 15, 2024 by Uberbrand

When the New Payments Platform (NPP) arrives, it will position Australia as a global leader in real-time payments. As exciting as that is, as a financial institution there are an array of practical considerations that you need to take into account. Key among them is managing the potential for fraud.

While fraud prevention may seem like a daunting task, in Australia we are well positioned to do so. Our existing services, such as “pay anyone,” are already well established, and we lead the world in smartphone adoption. That’s significant because smartphones offer greater opportunity for security and identification, including in-app messaging and biometrics.

We also have the benefit of being able to draw on key learnings from those who have gone before us in real-time payments. By studying the experiences of countries like the UK, for example, we can glean important insights and apply them here.

In this paper, we will outline the key considerations that you need to be aware of around fraud and explain what the NPP and Cuscal are doing to help prepare.

The reality is that although the NPP isn’t inherently riskier than our current payments system, you still need to be vigilant. Fraudsters are always looking for new opportunities to make money, so they could be waiting for the NPP to go live to try to test how secure it is.

To minimise that potential risk, it’s essential that you are ready when the NPP goes live.

Contents of the whitepaper:

Lessons learned from the UK’s Faster Payments Service
Understanding the threat
Addressing the problem of fraud and real-time payments
Spotlight on artificial intelligence and fraud prevention
Moving ahead with the NPP with confidence

4 ways financial institutions are preparing for the NPP

Posted on October 23, 2017February 1, 2024 by Uberbrand

What happens when payments are as easy and immediate as sending a text message? While the digital opportunities of Australia’s new super-fast payments system are exciting, its speed may also increase the potential risk of fraudulent transactions. The NPP (New Payments Platform) isn’t more vulnerable to security breaches, but banks will no longer have the luxury of time to detect and respond to fraudulent or suspicious transactions.

And that’s why Australian financial institutions are already preparing for NPP – by shifting their risk focus to planning and prevention.

The NPP is a platform that enables real-time clearing and settlement for simple or complex payment solutions, between two people or between many. When it launches next year, almost all Australian bank account holders will be able to make and receive payments in seconds.

The promise of bank transfers clearing almost instantly – even on bank holidays and weekends – is alluring for consumers, business and government. But when payments happen faster, there won’t be time for our tried and tested detection processes. Based on the UK’s experience with its Faster Payment Service, the most common risk is likely to be social engineering scams, where fraudsters convince a customer to make a payment by posing as a trusted brand. Account compromises and mule accounts (for money laundering) are other possible fraud issues.

Any financial institution connecting to the NPP will need to have real-time fraud detection and response controls in place.

As one of the primary architects of the NPP, Cuscal is working with more than 30 financial institutions to securely connect to this game-changing banking infrastructure. Here are four ways we’re working with our clients to get ready.

1. Preparing for PayID verification.

Forget BSBs and account numbers – with the NPP, bank accounts can be linked to the customer’s email address or mobile phone number. Easier to remember, these PayIDs are directly associated with the actual account name so there’s less risk of paying the wrong person. While this will help ensure payments go to the right place – it will also impact current payment verification protocols.

Financial institutions are responsible for registering customer information in PayID, and may be liable for any loss that results from incorrect or fraudulent data input. That’s why the account name associated with the PayID is an important control checkpoint and one banks need to pay particular attention to.

2. Setting strong controls for detail changes.

Every PayID can be changed – for example, if a customer gets a new phone number – so banks are setting up new control processes to ensure customer detail updates are verified. Participating financial institutions can also set their own customer transaction limits.

Reassuringly, the NPP solely focuses on actively authorised payments: every payment must be approved by the account holder so there is no assumption of authority (as there is with direct debits or can be with credit card payments). This protection complements the strong authentication procedures that banks have in place when updating account details, as knowing the account number is not enough for a fraudster to access someone else’s account.

3. Sharing knowledge.

Typical customer payment patterns are critical for fraud prevention, and Australian banks already have good visibility of this data. By working with Australian financial crime investigation and enforcement agencies, institutions are able to quickly identify scams and other fraudulent activity.

Financial institutions can supplement this shared knowledge with additional layers of real-time fraud monitoring. At Cuscal this includes a specialist fraud monitoring team, AI-enabled pattern recognition and data analysis and integration with the NPP’s inbuilt fraud detection capabilities.

4. Educating customers.

Changing habits is always hard – so to establish trust in the security of this payment platform, financial institutions are investing in ongoing education programs. As well as helping Australian consumers and businesses select and manage their PayIDs, they are building awareness of current scams, how to report fraudulent transactions, and how to protect their identity.

Our digital economy never sleeps – but neither will fraudsters. To ensure the NPP doesn’t open the door to a new scam opportunity, Australia’s financial institutions are already preparing for this latest wave of payment innovation.

Learn more about preventing fraud in a real-time world.

By Nathan Churchward, Senior Manager, Payments

Real-time payments gets real with brands unveiled

Posted on May 15, 2017February 1, 2024 by Rachael Shupe

Real-time payments just got a whole lot realer with the two public-facing brands of the New Payments Platform announced today. Adrian Lovney, CEO of NPP Australia Limited, revealed in a recent interview that the first thing consumers are likely to notice when the service goes live is their bank inviting them to register for a PayID. The other new financial brand consumers can expect to see from October is Osko. With this combined public release of the Osko and PayID brands, financial institutions participating in the New Payments Platform can begin to think of the ways Australian consumers will soon interact with these affiliated brands via their personal banking experience.

The announcement of Osko and PayID raises a number of questions important to both the industry and, in time, the end user. In particular, I was curious to know how PayID and Osko relate to one another and, perhaps more importantly, why do we need both brands in the first place?

Well, the industry has known for some time that BPAY’s overlay service was chosen as the first to be used in the New Payments Platform. It was identified as the initial way to showcase the New Payments Platform’s capabilities in as early as October 2015. The service’s brand promise has been well articulated from the outset: to provide businesses and consumers with an immediate, versatile and data-rich service to complete their everyday payments. The difference now is we know its public name: Osko.

How then does PayID fit within this scheme – how does it feature and what does it do that Osko cannot? Put simply, PayID is the brand name of the centralised addressing service that will enable direct funds transfer in an unprecedentedly personal and convenient, yet secure way. But this still leaves some wondering, how will it all work? PayID will work by linking financial accounts with recognisable and memorable pieces of information such as your phone number or email address. This will eliminate the need to select or re-enter bank account numbers without putting the security of your banking details and other information at risk.

Where then does PayID sit within the brand hierarchy of the New Payments Platform? There’s an easy way to conceive this, which is that PayID is the brand for the addressing service that can and will be used to power Osko (and other overlay services down the track too). In other words, PayID will store smart addresses for payments but Osko is the hero brand, for the first overlay service anyway, which everyone is going to use to make real-time P2P payments conveniently and securely.

It’s early days yet but I wonder what can be made of the two brand names. In particular, the first time I heard Osko, it struck me as slightly unusual. Then I considered the names of other leading brands and how they were first received when they launched in the market. Google and Uber, for example, are two brands that have achieved universal resonance, yet they probably didn’t mean anything to you at first. They certainly didn’t for me. Now, however, we find that in our thirst for knowledge in a digital age, we no longer search for something – instead, we Google it. Equally, rather than riding in a hired vehicle to get us from A to B, we simply Uber it.

While my predictive powers are not strong enough to pinpoint the ways (or precisely when) Australian consumers will begin to use Osko and PayID synonymously with making an instant payment, I think we’ve lived through enough examples which show how this might happen. When BPAY developed the Osko brand in conjunction with brand and marketing specialists, feedback from the test groups was very positive. In the time that I have used the new name in conversation, which has been for a little while now, it has really grown on me. It seems to be hitting the mark with others too.

What will really work in Osko’s favour is the open invitation it has created for BPAY and financial institutions to collaboratively shape its meaning. This reflects BPAY’s intention for Osko to be a blank canvas that allows industry participants to co-create the meaning of the new brand in the lead up to its launch.

I expect that this approach to building its brand identity will increase buzz and drive discussion around the new value it creates for Australian consumers. When I consider the New Payments Platform in its broadest context, I am mindful that up until now it has often been talked about in terms which highlight the revolutionary nature of its service.

While this is not misleading, there is another, simpler lens through which we can understand the New Payments Platform and its two public brands now that they have been released, which is that they will collectively close a current gap in the Australian payments ecosystem – the gap being our lack of a simple, convenient service available 24/7 for individuals and businesses to request and receive payments without having to disclose their personal banking details.

By Nathan Churchward, Senior Manager, Payments

NPP overlays will give great customer experiences

Posted on March 4, 2016October 27, 2023 by Uberbrand

The New Payments Platform (NPP) will be arriving in 2017 and will be a catalyst for fundamental change in the way financial institutions, businesses and everyday people make payments.

Most people in Australian payments-focused companies are aware of this much, but at Cuscal we’re finding that people are a bit hazier on the finer details of exactly how the NPP will work. One part in particular which has been causing some confusion is exactly how the NPP’s overlay services work. What do they do? How do they interact with the NPP’s basic infrastructure? And, what do they offer beyond the promise of real-time payments?

Most people will experience the NPP through overlay services
The first thing it’s important to know about overlay services is that they’re going to be the public face of the NPP – the way that most people will experience it. Here at Cuscal we’ve started to think of the NPP like the internet and its overlay services as the websites, portals, apps and other online tools that make it exciting, interesting and useful.

As I mentioned in my last LinkedIn post, BPAY will be offering the NPP’s first overlay service, currently known as the Initial Convenience Service (although it will get a consumer-friendly name before launch). The ICS will be live from Day 1 and will add important extra functionality to the NPP by allowing:

People to make payments in close to real-time availability via mobile devices
Payments to be linked securely to documents (e.g. a remittance advice or tax statement)
People to request money from others (Payment requests)

The possibilities for overlay services are nearly limitless
What’s really exciting about the NPP’s overlay services though is what will be possible – just about anything! We think that one of the most valuable things that they will offer is the possibility to create great customer experiences and this is what we set out to explore in our new animation and white paper.

The animation gives a simple introduction to overlay services, explaining what they are, why they’re important and showing how some potential overlay services and might benefit businesses and consumers. Watch the animation.
The white paper goes into more detail about how the NPP’s basic infrastructure will work, the different types of overlay services which might be created and how this could all combine to create great customer experiences. Read the Cuscal Using the NPP white paper.

By Nathan Churchward, Senior Manager, Payments