Latin America is one of the fastest-growing regions for digital banking & payments and respectively, one of the most targeted by fraudsters. Fraud is committed on various levels aiming at banked, unbanked, and other consumers. Fraud attacks range from basic ATO, new account opening, and card fraud to cross channel and multi-banking attacks.
In this Q&A, Ziv Cohen shares his thoughts on the main digital fraud challenges in Latin America for financial institutions, eWallets, and eCommerce. He outlines where the industry is directed in the coming years.
Q: Tell us a little about your professional background. What excites you about preventing digital fraud.
Ziv: I have over 20 years of experience working with the cybersecurity and financial fraud spaces on a global scale. With Paygilant, I have the opportunity to help businesses in Latin America and other parts of the world avoid fraud losses while improving their customers’ experience to scale up their business. I am excited about exposing them to Paygilant’s next-gen frictionless fraud prevention technologies.
This past year has humbled the world and shown us all, that we need to stay vigilant and consider the price, in case we’re not ready in advance. The world has changed. Human behavior has changed, and digital payments have become the fastest growing instrument, rapidly adopted by the general population. Although Latin America was already on a fast track to digitization, the pandemic has accelerated the digital payments phenomenon.
Q: What are the main digital fraud challenges your clients in LATAM are facing?
Ziv: With the growth of digitization and the onslaught of mobile phones in LATAM, fraudsters are shifting rapidly to mobile fraud, flying under the radar of the existing security and anti-fraud systems. Neo banks, eWallets, food & delivery, and many other businesses rely on traditional authentication methods and anti-fraud fraud tools, which can be easily outsmarted by fraudsters.
We encounter all forms of fraud targeted against our customers – from simple Account Takeover using stolen credentials and social engineering, to cross banking fraud using multiple account opening, zero-day emulators, and mobile device dumping. Our customers also experience sim-swap and coupon fraud attacks, where all “seems to be legit”. They have noticed that traditional fraud prevention technologies they use produce high false positives and are simply not suited for today’s attacks. A solution that was suitable a few years ago is proven to be much less effective today. Especially when fraud prevention can no longer contradict the user’s experience and the need for a seamless process with minimal interference.
It is interesting to point out that cyberattacks have increased between 30%- 40% in Latin America in recent years, with 92% of banking institutions in Latin America suffering cyberattacks in 2018. Mexico, Uruguay, Chile, and Ecuador are among the countries that have been most affected.
These statistics indicate that many institutions in Latin America need to invest more in fraud prevention strategies and advanced solutions.
Q: How has Paygilant been able to help Latin American financial institutions and fintech’s prevent digital fraud?
Ziv: In recent years, cybercriminals have found an effective, accelerated, and low-cost way to attack the financial sector in Latin America. Their schemes tend to be very targeted and homegrown, which makes it harder to deal with on a broader scale.
Unlike other solutions, Paygilant can X-Ray the customer’s environment from Day-1 and apply its six Intelligence-Set solutions. By looking broadly at the connected device, user’s behavior (transaction activity, spending habits, and behavioral biometrics), application structure, pain-points, breaches, and business goals, we are able to prevent fraud while reducing false positives and friction.
But it is not just about innovative technology. Customers in LATAM need trusted advisors, and we have subject matter experts in the world of threat and threat intelligence located in the region. These people work hand-in-hand with our customers to understand how best to deploy the technology, how to fit in our real-time risk scores into the technology stack, and how best to align the Paygilant capability to maximize their operational effectiveness. Our growth in the region is a direct result of the value we bring to our customers, which exceeds their satisfaction.
Q: How do you see digital banking and payments changing in Latin America in the coming years?
Ziv: Incumbent banks will need to ensure that their fraud protection layers are up to date and effective against the ever-transforming fraudsters. Challenger / Neo banks strive to replace traditional banking with more tailored/easy to use products, require a bespoke solution that can provide a robust wall against fraud attacks while meeting their superior user’s experience approach. Moreover, such a system needs to be easy and simple to deploy while producing immediate value. Retailers and other verticals providing their services over the web and most mobile apps, will as well, need to meet their customers’ expectations by accepting legitimate transactions while preventing card/coupon and other fraudulent attempts.
For example, in Brazil, the recent PIX regulation allows citizens, companies, and government entities to make instant payments 24/7/365 through mobile phones and online. Clearly, authentication and fraud prevention will be a vital factor in PIX’s success.
I believe that like PIX in Brazil, other LATAM countries will follow the same path. Innovation and fintech designed fraud prevention and smooth authentication will be an integral part of it.
Learn more about how Paygilant is making digital payments both secure and frictionless.