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Strong customer authentication suffers another delay

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Biometrics authentication is fast and easy to deploy, it also benefits all stakeholders during an online payment transaction

The Financial Conduct Authority (FCA) recently announced it is allowing extra time for the roll-out of Strong Customer Authentication (SCA) for e-commerce transactions in the UK, and the move is likely to be followed by others across Europe.

In a statement published on 30 April, the FCA confirmed: “In the exceptional circumstances of the COVID crisis, we are giving the industry an additional six months to implement Strong Customer Authentication (SCA) for e-commerce.”

The definition of SCA was set out in PSD2, and its original implementation deadline for all e-commerce transactions had been set to September 2019, but following an announcement by the European Banking Authority (EBA) on 21 June 2019, the FCA agreed to a phased roll-out plan with full compliance to be achieved by 14 March 2021.

This new extended deadline of 14 September 2021 provides an additional opportunity for online merchants to deploy and test new processes in line with SCA requirements, and ensure the e-commerce industry, card issuers, payments firms and online retailers are able to align their systems and processes.

PSD2 brought fundamental changes to the European payments market, but concerns were raised over the time it would take to successfully deploy SCA in complex payment environments such as e-commerce.

According to the EBA, “it is imperative that all actors, including card schemes and merchants, take the steps necessary to apply or request SCA and thus avoid situations in which payment transactions are rejected, blocked or interrupted”.

PSD2 defines SCA as an “authentication based on the use of two or more elements categorised as knowledge (something only the user knows), possession (something only the user possesses) and inherence (something the user is) that are independent”.

Two out of three of these factors must be applied to provide strong authentication.

A detailed analysis of the various authentication elements that meet SCA compliance requirements was shared in the Opinion of the European Banking Authority on the elements of strong customer authentication under PSD2.

Identity verification is at the heart of PSD2, and must be supported by a Strong Customer Identity Verification (SCeID) process using two-factor authentication.

Existing technology, built to support the KYC requirements associated with anti-money laundering regulations, can be used to support a strong remote identity verification process that protects online payments, reduces compliance costs, retains customers and supports increasing market share.

To truly protect online payment transactions, organisations should apply an authentication method that reliably establishes – as per the EBA recommendations – that “the person claiming a particular identity is in fact the person to whom the identity was assigned”.

Two of the three SCA factors that can be considered – what you know and what you have, which often just consist of a password and a 2FA-based SMS sent on the user’s phone – are regularly compromised by large-scale data breaches, social engineering attacks, phishing scams, SIM swap fraud and man-in-the-middle attacks. This leaves the “who you are” (or biometrics) as the only factor that can reliably be used for strong authentication.

One of the strongest biometric elements available is a user’s 3D face map. Thanks to the widespread use of biometrics on smartphones, consumers are already used to this technology for authentication.

In a survey by Visa, two-thirds of respondents confirmed using biometrics and found them as easier and faster to use than traditional passwords.

The top three benefits users particularly like about biometric authentication are:

  • no longer needing to remember passwords (42%);
  • improved security over passwords (34%);
  • not forgetting or losing an authentication method (33%).

By leveraging the same biometric – a 3D face map – for initial identity proofing and ongoing user authentication, organisations can more effectively establish an identity corroboration hub and reliably assess the digital identities of remote users.

Biometrics authentication is not only fast and easy to deploy, but it also benefits all stakeholders during an online payment transaction: consumers making the purchase, retailers selling the products and financial institutions enabling the transactions.


Sponsored insights by Jumio

Source: https://www.fintechfutures.com/2020/05/strong-customer-authentication-suffers-another-delay/

Fintech

The Philippines launches government-owned OFBank for overseas citizens

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The Philippines Department of Finance (DOF) has announced the launch of Overseas Filipino Bank (OFBank), a digital bank allowing customers to complete payments across the globe.

OFBank Logo

The new bank aims to enrol 2,000 new customers a day.

Land Bank of the Philippines worked with the DOF to create the new bank.

OFBank will operate as a fully-owned subsidiary of LandBank. It will use digital onboarding, including the taking of a selfie, to authenticate new customers.

The new bank offers three types of accounts. Its main account is an OFBank Visa debit card for overseas Filipinos. This is in addition to an account for beneficiaries, as well as an account for children.

According to the Philippine Daily Inquirer, the new bank aims to enrol as many ad 2,000 new customers a day.

Leila Martin, CEO of the new bank, says that the bank aims to serve the financial requirements of overseas Filipinos.

“As the OFBank becomes fully digital, we aim to better serve the banking and financing requirements of our [citizens] abroad, as well as their families here in our country.”

She adds: “Rest assured that OFBank will continuously work on providing safe, reliable and secure digital banking.”

Founded in 1963, Land Bank of the Philippines has a special focus on serving the needs of farmers and fishermen in the country.

Landbank is the fourth largest bank in the Philippines by assets, and is the largest government-owned bank.

It has a network of 365 branches and more than 1,600 ATMs.

Related: UnionBank to tap rural Philippines with 11,000 remittance counters

Source: https://www.fintechfutures.com/2020/07/the-philippines-launches-government-owned-ofbank-for-overseas-citizens/

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Sopra Banking Software taps Tink’s data channel

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Sopra Banking Software, the subsidiary of Paris-based technology firm Sopra Steria, has partnered with Swedish open banking provider, Tink.

The partnership will see Sopra tap Tink’s open banking solutions. These include data aggregation and enrichment, payment initiation, and personal finance management (PFM) technology.

Tink founders

Tink’s CEO Daniel Kjellen and CTO Fredrik Hedberg

Sopra Banking Software serves roughly 1,500 banks and financial institutions across the world. This makes the partnership a big milestone in Tink’s growth trajectory.

The partnership

Tink says the Sopra Banking Platform will use the start-up’s technology to offer new cloud-based digital banking solutions.

Sopra’s banking platform currently offers financial firms a catalogue of retail and business products. These span across accounts, savings, lending, payments, channels, and compliance.

Tink’s data will essentially power future banking products offered by Sopra. The start-up called the partnership a “big leap for open banking in Europe” in a statement.

Later in 2020, Sopra plans to use “several” of Tink’s own solutions, including multi-banking, enhanced credit scoring, and integrated payments and transfers.

Tink’s growth to date

The Swedish start-up already connects to more than 2,500 banks and taps roughly 250 million bank customers across Europe.

The fintech landed a second strategic investment from PayPal in June. This undisclosed investment added to Tink’s latest €90 million investment round which took place in January 2020.

At the end of March, the fintech acquired Madrid-based Eurobits technology, a firm which provides account aggregation services, for €15.5 million.

Part of the start-up’s growth strategy following its €90 million investment saw Tink acquire Eurobits to expand its connectivity across Europe.

In December, Tink also opened Italian, Portuguese and Spanish offices. This followed a major deal with Portugal’s largest bank, Caixa Geral de Depósitos.

Read next: Tink lands second strategic investment from PayPal

Source: https://www.fintechfutures.com/2020/07/sopra-banking-software-taps-tinks-data-channel/

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Australia Saw Over 80,000 Financial Complaints Last Fiscal Year

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The Australian Financial Complaints Authority (AFCA) has received 80,546 complaints from Australians on financial disputes with banks, insurers, super funds, and other financial firms in the last 12 months.

The number of complaints received between 1 July 2019 and 30 June 2020 jumped 13.7 percent from the previous year. Most of the complaints were about credit, insurance claims, and superannuation.

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Announced on Thursday, the watchdog has secured AUD 258.6 million ($179.12 million) in compensation and refunds direct to consumers in that period.

The regulator also detailed that it had resolved 78 percent of all the received cases and 73 percent of the complaints were settled in favor of the complainant, with banks being the most complained about financial institutions.

Commenting on this, David Locke, chief executive officer and chief ombudsman at AFCA, said: “One in ten complaints also related to financial difficulty – where a consumer was unable to make repayments on loans due to unforeseen circumstances or over-commitment.”

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COVID-19 increasing financial hardships

The ongoing crisis due to the COVID-19 outbreak also added to the complaints related to financial difficulties.

“Australian consumers have faced a number of significant challenges this year,” Locke added. “The pandemic has had a particular impact on Australian households, with 20% of COVID-19 related complaints being about financial hardship.”

Since the virus was declared a pandemic in March, AFCA has received 4,773 complaints relating to COVID-19 – out of them 1,813 were general insurance claims and over 1,500 were travel insurance complaints.

“We commend financial institutions for their quick response to the pandemic. As always, we encourage banks and insurers to maintain open and transparent communication with their customers about the support available to them if they’re experiencing financial difficulty,” he continued.

“We anticipate seeing more financial difficulty related COVID-19 complaints over the next six months as government support, such as JobKeeper payments are wound back, along with the end of financial firm initiatives such as a ban on rental evictions, and mortgage pausing.”

Source: https://www.financemagnates.com/fintech/news/australia-saw-over-80000-financial-complaints-last-fiscal-year/

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