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PSD2 requires strong customer authentication when payments are initiated, however there are exemptions from strong customer authentication for those who can keep their fraud levels under specified reference fraud rates. This allows payments under €500 to be secured using transaction risk analysis. The lower a PSP can keep their fraud rates, the more they will be able to use transaction risk analysis to secure payments. Using transaction risk analysis will help the PSP to lower friction in the customer payment process, improve customer service and keep the cost of securing payments lower.
Managing payment security for PSD2 has implications for consumers who are using banking and card services to make payments. When strong customer authentication needs to be used or when authentication fails, banks need to communicate effectively with their customers. This means providing customers with the information and instruction they need at the appropriate time using the right channel. Payment service providers that don’t manage the customer communications process well could lose customers as a result.
The FICO® Falcon® platform performs transaction risk analysis to secure payments that do not need strong customer authentication, it is proven to do this at the volumes and real-time speeds required to effectively manage fraud for PSD2.
By using a combination of advanced analytics, including supervised and unsupervised machine learning you can detect and stop fraud more quickly and before it rises fraud basis points to a level that will force you to perform strong customer authentication more frequently.
By using our expertise and fraud analytics we can help you to drive fraud rates down to below the designated bands that force strong customer authentication, this in turn means fewer interrupted customer transactions and lower overall authentication costs.
FICO has developed an integrated approach to managing fraud for PSD2, incorporating rules and profiles based on PSD2-specific parameters with innovative machine learning techniques. This allows your fraud operations to rapidly adapt to emerging fraud trends. Information is fed back into the models so they are constantly developing to better support you. FICO® Customer Communications Services is integrated with the FICO® Falcon® Platform to provide two-way communication with customers. This keeps them informed and provides information back from them, that can, in turn, be used to enhance fraud detection. Models can be further enhanced with data shared with other PSPs in our fraud consortia so that your fraud detection is enhanced with more relevant data.
To help you to comply with PSD2, continue to adapt to evolving fraud scenarios and make the most of the opportunities that open banking brings, we offer a range of services, including:
Prepare with expert advisors
Protect with a proven fraud detection solution
Adapt and futureproof with machine learning
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