Three top banks employ Deep Labs’ platform to differentiate between transactions that are anomalies and those that are fraud.
Financial institutions are fighting the wrong war when it comes to credit card fraud, said Scott Edington, CEO of San Francisco-based Deep Labs.
Fraudulent transactions are expected to total $32 billion worldwide in 2019, according to Nilson. But banks should be paying more attention to false positive declines, Edington said.
False declines — payment-card transactions that are incorrectly flagged and canceled — led to losses of $331 billion globally in 2018, said Edington, citing a study by research and advisory firm Aite Group.
According to Mobile Payments Today, as the mid-September deadline draws closer for a major transition of customer authentication rules for ecommerce transactions in Europe, a growing number of voices are seeking a pause to prevent what they fear could be a logistical nightmare for merchants, banks, payment processors and consumers.
The issue involves the transition to Secure Customer Authentication, a move by European regulators under what is called the second Payment Services Directive (PSD2) to lower the risk of fraud as more consumers make purchases through ecommerce channels.
Essentially future purchases will require all transactions to be authenticated using two of three authentication methods:
Something a customer knows, like a PIN code or password.
Something a customer has, like a smartphone or token.
Something that uniquely identifies the customer, like a fingerprint or facial recognition.
“The PSD2 directive has faced strong opposition in the market as the timeline to implement a solution with the complexity of the new Strong Customer Authentication rules for ecommerce transactions has always been seen as a challenge,” Scott Edington, CEO of Deep Labs told Mobile Payments Today via email. “The two-step verification process, with many requirements within that new process, requires a high degree of technical and security knowledge and time to build and put into production that new process.”
The San Francisco-based digital security firm has used artificial intelligence to develop solutions to meet the new PSD2 requirements. In March, for example, it launched “Deep Identity” to track transactional risk analysis, which leverages data signals and context aware machine-learning to help confirm risk levels.
In this contributing post to FinExtra, Deep Labs Chief Strategy Officer Michael Lynch discusses that within organizations, fraud professionals and those responsible for revenue growth have been working against each other for decades. You can stop fraud almost completely of course, by making it nearly impossible for your customers to transact by placing limits on the transaction or transfer amount, excessive manual reviews, and requesting additional authentication information that leads to abandonment.
Or you can maximize revenue by taking on more risk by minimizing the consumer security steps and security defenses.
Understanding and recognizing your consumer from a 360-degree view, both with respect to risk and fraud mitigation, to their propensity, motivation to buy, and predicting their next product need is now possible using machine learning and artificial intelligence.
In this article, Deep Labs Chief Strategy Officer Michael Lynch discusses how artificial intelligence is disrupting markets and providing a competitive advantage for early adopters for those investing in the technology now.
Many banks, payment companies and fintechs are attempting to gain a competitive edge in the marketplace by embracing artificial intelligence, via innovative partnerships, strategic investments, and attempting to develop their own cutting-edge technology.
Examples include automation of manual processes and repetitive tasks, predicting how to better serve customers with advice or predicting their next product need, fraud and risk management, chatbots and intelligent virtual assistants, and personalized user experiences.
SUNNYVALE, CA., March 14, 2019 — Plug and Play has selected 135 startups to participate in their Spring 2019 accelerator batches. Entrepreneurs from each startup will take part in one of the following programs: Brand & Retail, Cybersecurity, Energy & Sustainability, Fintech, Food & Beverage, New Materials & Packaging, and Supply Chain. Deep Labs has been selected to participate in the Fintech accelerator Batch 9 program.
“It is fantastic to see such a talented group of entrepreneurs accepted into our programs. We aim to give our startups the best chance for success and these next three months will give them the tools and connections they need to thrive,” said Saeed Amidi, Founder and CEO of Plug and Play. “I am excited to see what they can accomplish when integrated into our ecosystem.”