2023. június 6., kedd 13:43 |
PwC Strategy& study: IBAN-name checks can increase confidence in instant payments, but are not a universal solution (part 1) |
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Munich, 6 June, 2023 (APA/OTS) - Instant payments are becoming more popular in Europe, but at the same time attract fraudsters - In future, according to draft EU legislation, banks should therefore check before every payment whether the IBAN and account-holder name match - Banks and payment service providers take a nuanced view of the proposal |
IBAN-name checks can help to increase the attractiveness of instant
payments within the EU, notably by increasing trust in the new mode
of payment. But in order to effectively combat attempts at fraud and
to bring about greater acceptance of instant payments Europe-wide,
they need to be supplemented by further measures. Any possible
standardization should, at the same time, be open to solutions
already established in individual countries and aim at efficient
implementation. These are the findings from the study "IBAN-name
check: Current developments and concepts" co-authored by Strategy&,
PwC's global strategy consulting business, together with
Oesterreichische Nationalbank (Austrian National Bank, OeNB),
Deutsche Bundesbank, and the Euro Banking Association (EBA). For the
study, 17 representatives of European banks, public institutions and
IBAN-name check providers were interviewed.
IBAN-name checks just the first step
Instant payments are being used with increasing frequency within
the Eurozone. At the same time, this payment method can also favor
fraud. Accordingly, a legislative proposal from the European
Commission envisages the mandatory introduction of IBAN-name checks,
in order to counteract this and increase confidence in this mode of
payment. Before every instant payment, a background check is
performed as to whether the IBAN and account-holder name match.
Above all, this check should partly combat Authorized Push Payment
(APP) fraud, where fraudsters induce their victims to transfer funds
to what is ostensibly a known account, but which in reality is one
controlled by the fraudsters. According to the results of the study,
IBAN-name checks can make a significant contribution to increasing
confidence in instant transfers and ensuring a good user experience.
At the same time, almost all the experts interviewed emphasize that
IBAN-name checks alone cannot significantly drive down instances of
fraud.
"Since the bank fraudsters' methods are continually evolving,
IBAN-name checks can only be one strategic component in a series of
further measures developed by banks and payment service providers
themselves. Legislative initiatives like the move by the European
Commission should specify a framework for this, within which the
financial actors involved are able to drive forward and effectively
implement their initiatives," says Petia Niederländer, Director
Payments, Risk Monitoring and Financial Literacy at Oesterreichische
Nationalbank and co-author of the study. "Those using the IBAN-name
check as a strategic component can not only increase trust in their
own institution, but can also simultaneously develop new business
models via payment handling, such as account-holder verification for
online banking via smartphone."
Many of the actors interviewed are also calling for the costs for
introducing the technology to remain manageable, for bulk payments
to be exempted from IBAN-name checks, for these checks to be
introduced as mandatory only for private customers, and for it to be
possible to continue using existing solutions for corresponding
checks. One major point of criticism is the implementation period,
which is considered to be too short given that other provisions and
Directives, such as on PSD3, need to be realized within the same
timeframe.
"Whilst not overestimating its importance, many financial actors
view the introduction of IBAN-name checks as a relevant component
for expansion of a Europe-wide system of instant transfers that is
supposed to be both user-friendly and secure," comments Andreas
Pratz, partner at Strategy& Germany and co-author of the study. "The
experiences of the banks should be taken into account in the planned
regulation, and the continuing use of established solutions for
IBAN-name checks in individual countries made possible, in order to
shape implementation in other countries efficiently. In addition,
the challenge is to remain open to further measures by the credit
industry and thus to contribute collectively to combating fraud."
(continues)
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2023. június 6., kedd 13:43 |
PwC Strategy& study: IBAN-name checks can increase confidence in instant payments, but are not a universal solution (part 2) |
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Munich, 6 June, 2023 (APA/OTS) - |
Boosting trust and security
A look at the countries where similar procedures to the IBAN-name
check are already in use reveals both the potential and the limits
of the technology. In the Netherlands, where 90% of all domestic
payments are already handled as instant payments, the incidence of
invoice fraud at one of the banks that had installed an IBAN-name
check declined significantly. However, over the same time period
fraudulent transactions migrated to the cross-border space. The
experience of UK banks has been similar. At banks with IBAN-name
checks (the "Confirmation of Payee" service, CoP), APP fraud fell by
an average of 10%. Over the same period, however, it increased by
over 60% at banks that had not introduced CoP services. Banks and
payment service providers in other countries who are similarly
implementing IBAN-name checks observe above all growing trust on the
part of users, and improved ease of operation when using various
payment systems.
"IBAN-name checks are not an all-purpose tool - a fact confirmed in
the assessment by fraud experts in our pan-European working group,
who have looked at which fraud scenarios are successfully blocked by
such checks," says Thomas Egner, Secretary General at Euro Banking
Association and co-author of the study. "To maximize the impact of
these checks, it is therefore all the more important that they are
used Europe-wide and can also operate on a cross-border basis. That
is the only way to prevent fraudsters from simply being able to go
about their business in SEPA countries where such solutions are not
even up and running. Information-sharing and analysis methods should
also have the effect of boosting efficiency and assisting in
combating fraud, particularly if used Europe-wide."
The full findings of the "IBAN-name check: Current developments and
concepts" study are available on request, or at:
https://www.strategyand.pwc.com/de/en/industries/financial-services/iban-name-check.html
About Strategy& www.strategyand.pwc.com
About Oesterreichische Nationalbank (OeNB) www.oenb.at
About Euro Banking Association (EBA) www.abe-eba.eu
About Deutsche Bundesbank www.bundesbank.de
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