The identity management, location intelligence and fraud prevention company, GB Group (GBG), highlighted the six predictions for the financial services and fraud landscape in 2021.
The six predictions are:
1. Covid-19 will drive a separation in fraud technology investment.
2. Digital customer experience is expected to skyrocket.
3. Collaboration and consumer data drill-down are to shape digitisation standards.
4. Expanding availability of Buy Now Pay Later (BNPL) across South East Asia (SEA).
5. Mobile-first technology and data intelligence as essentials in building blocks for digital onboarding and transacting.
6. Socially engineered first party fraud and identity crimes taking on a new level of complexity.
For the first one, Financial Institutions (FIs) will be making a more conservative approach to overall investment and sustaining cash flow for countries that have not entered a stable recovery period.
In contrast, deprioritising investments in fraud technology could leave countries unprepared for the potential rise in financial crime and fraud during financial hardship.
“FIs in Malaysia may become even more hard-pressed for stronger fraud prevention technology to combat an increase in financial crime because of the reinstatement of the Movement Control Order (MCO 2.0) across most of the country,” Dev Dhiman, Managing Director of GBG Asia Pacific, said.
Secondly, the Covid-19 outbreak has set expectations around customer experience (CX) including same-day delivery services, and real-time shipping tracking thus impacting customers’ CX standards for FIs.
In 2021, FIs and fintechs will continue racing to deliver instantaneous services through new financial products. There is a probability that the financial services sector will explore the replication of successes from other industries to take CX to the next level.
Additionally, the next trend is the cross-vertical collaboration and consumer data drill-down which shapes the digitisation standards.
“This collaborative mindset is likely to continue in 2021 and beyond because FIs have already reinvented partnerships to form new market propositions,” the Managing Director added.
GBG predicted that the rise of BNPL services has disrupted the ecosystem for shorter-term credit services is part of the six highlighted trends. Yet, FIs need to remain vigilant in how BNPL products are rolled out, credits are distributed, and debts are managed.
The next highlight is that FIs are automating identity verification, streamlining biometric and facial verification, document verification and data matching entirely in instant Know Your Customer (KYC).
Mobile metadata, device usage patterns and SIM card records are alternatives to traditional verification methods, datasets, and data sources.
These alternatives offer data intelligence which FIs could use to fill gaps in physical records, providing assessment and validation to the authenticity and quality of consumer profiles and borrowing intent of these untapped segments.
The last key prediction by GBG is that socially engineered first party fraud, identity crimes like synthetic ID and impersonations would take on a new level of detection complexity.
“As such threats continue to broaden alongside other industry-wide trends, consumers’ expectations of FIs’ commitments to protecting and futureproofing their financial services and products will grow,” the Managing Director concluded.