Teresa Cameron, Finance Director at Clear Junction 

Real-time payments have transformed how businesses make transactions in the global digital payments landscape, working faster, more efficiently, and managing funds over vast distances in seconds. According to the Bank of England, the total value of global cross-border payments is expected to grow from $150 trillion in 2017 to more than $250 trillion by 2027.

No doubt, cross-border payments are vital for businesses as we operate in an ever-increasingly globalised world. But with this expansion comes more sophisticated and invasive cybercrimes. According to analysts at J.P. Morgan, cross-border payments are especially vulnerable to fraud, as criminals exploit unclear regulations and inconsistent messaging standards across different regions.

Businesses are finding it hard to navigate new fraud techniques, and criminals are becoming increasingly more sophisticated as technology develops. This, alongside the confusing regulatory landscape, means that companies often find themselves dealing with a patchwork of rules and regulations and businesses feel essentially stuck between a rock and a hard place, unsure where to step. So how do you navigate this difficult, and often landscape?

Cybersecurity starts at home.

The digital payments world has seen a shake-up in recent years, particularly with the very high-profile FTX scandal and later the Silicon Valley Bank collapse, which led to increased scrutiny and a regulatory crackdown globally, across the industry. In the UK, the FCA (Financial Conduct Authority) has enforced the Consumer Duty, which has set out a new framework to protect consumers and aims to hold businesses in the financial service industry to a higher standard than before.

The Consumer Duty and other regulations that are being formed right now are a framework for continuous improvement, and it’s the responsibility of these organisations to also ensure they are fostering a culture of cybersecurity awareness. Businesses face an array of Cyber Threats, from phishing attacks to scam investments, and being proactive will not only safeguard your own integrity but also contribute to the resilience and sustainability of the broader fintech ecosystem.

The first step is to put in place standardised training for employees that follows the latest regulations. Things like regular workshops can provide them with practical knowledge to identify and respond to potential threats, as well as knowledge-sharing sessions that can help fortify the human element in the security chain and should become integral to your overall business strategy.

Combatting Crime with Collaboration.

Financial institutions, fintechs, and regulators each bring unique perspectives and insights to the table, and by working together and sharing these perspectives, this collaboration allows them to pool their knowledge and data regarding emerging cyber threats.

Through sharing intelligence information, financial institutions and fintechs can share real-time threat intelligence with each other and with regulators, including information on emerging threats, vulnerabilities, and attack patterns from fraudsters. This can help create a comprehensive understanding and help inform the training workshops mentioned above so your team is aware of the latest methods from criminals.

Collaborations also allow financial services to have a say and contribute to the latest regulations being formed. By working with regulators and having an open dialogue on cybercrime, you can openly help shape the future of secure cross-border payments and refine cybersecurity policies and standards that are practical and adaptable to evolving threats, including compliance requirements that protect both businesses and consumers.

Leveraging the Latest Technology.

In the ongoing battle against ever-evolving cyber threats, modern technologies play a pivotal role in safeguarding payments. AI has been the talk of the tech town over the last year and is a powerful tool in the fight against cyber threats. Machine learning algorithms can analyse vast datasets to identify patterns indicative of cyberattacks or anomalies in network behaviour. By leveraging machine learning algorithms, it can help detect patterns indicative of cyberattacks and automate threat response, reducing vulnerabilities in real-time and minimising the impact it could have.

Blockchain, known primarily for its role in cryptocurrencies, offers robust security features that can be applied beyond financial transactions. Blockchain can revolutionise identity management by creating self-sovereign identities. Individuals have control over their personal information, sharing only what is necessary for verification. This minimises the risk of identity theft and reduces reliance on centralised identity providers.

Real-time payments will continue to shape and reshape the global financial landscape, and it’s never more imperative for financial institutions to protect themselves against threats from fraudsters. The growth of cross-border payments has increased the risk of cybercrimes that take advantage of fragmented regulations and messaging standards. Effectively addressing cyber threats and compliance in this complex landscape requires a multifaceted approach but done successfully it will build a resilient and safe financial future across the industry.

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