Banking / Neo Banking

Banking institutions have tried offering new experiences such as competing payment services. However, these new offerings generally demand an important investment in new technology, such as mobile friendly site design, cryptocurrency, and digital wallets. They must be ready to answer to continuous technological advancements, changing consumer habits and, sometimes, underserved and underbanked markets while at the same time having to fight ever-changing fraud patterns and predict consumer expectations.

Fintech and Deep Tech have the ability to assist banking and neo banking institutions in their need to identify redundancies, consolidate functions, provide clear messages both internally and externally and efficiently stop financial fraud. These needs are key to modernizing financial institutions and a service in which FinTech and Deep Tech are fully involved.

At the end of 2014, the European Banking Authority (EBA) published guidelines to increase the Internet payments’ security, which state that a minimum set of security requirements are to be implemented by (PSPs) in the EU by August 1, 2015. These guidelines take from the 2013 recommendations issued by the European Forum for the Security of Retail Payments (SecuRe Pay) and demand that the issuing PSPs support Strong Customer Authentication (SCA) for the initiation of payments and access to sensitive payment data. Furthermore, the guidelines necessitate that PSPs who offer acquiring services should uphold the issuer PSP for this purpose and that the e-merchant do likewise for card transactions over the Internet.

The banking sector is fundamentally vulnerable to Money Laundering (ML) and Terrorist Financing (TF) risks because of several drivers such as the large customer base, high transaction speed and the large volume of financial flows. These factors could possibly make the concealment of illegal transactions a lot easier.

According to a 2018 survey conducted by the market research firm Harris Insights & Analytics, bank fraud and online scams reached a record high in 2017, with over 60 million people affected in the US alone.

Using advanced risk management technology makes it easy for users to freely share fraud cases and communicate new fraud patterns. These technologies have the potential to centralize the data from your main systems and can provide your team with a platform that protects all key banking channels. This allows your analysts to work from anywhere as well as giving you the chance to monitor your team’s performances. Additionally, the same platform can be used to manage rules and utilize deep learning models.

Users and companies are more and more moving their banking activities to the online and mobile channels, especially the digital-native Millennials. While this relocation to digital opens new doors for engagement, it is also the source of many new possibilities for fraudsters to exploit these anonymous channels.

The usual solutions try blocking the cyberattacks, and focus on already-identified threats. In the end, the solutions that do not include Deep Learning models quickly show their limits in fighting financial fraud. Banking institutions should invest in effective and agile fraud detection solutions that can make sure that a user’s identity is protected and that fraudsters can quickly be identified, whatever the fraud patterns used or the moment when the fraudster hijacks the banking session.

The new guidelines in banking, neo-banking and finance to protect merchants and users from financial fraud is actually an incredible opportunity for all parties. Through risk management, they all have the potential to reevaluate their approach to their customers’ base and to combine a seamless buying experience with a high level of security.

For that purpose, banking institutions and merchants alike need an advanced, customized risk management strategy that transparently ensures the security on all their digital platforms, for both their own and their customers’ sake. Given the variety of fraudulent methods used to access financial information, it has become key for a holistic approach to security to be taken.

Overall, the aspiration of banking and neo-banking institutions to be pacesetters in providing cutting-edge digital financial services cannot be imagined without the proportional aspiration to high standards of security for those same services.

Payment Services Providers (PSPs)

PSD2, in its article 98 addressed to Payment Services Providers (PSPs), provides that companies shall be exempted from applying Strong Customer Authentication (SCA) based on the level of risk involved in the service provided, therefore underlining the importance of risk scoring.

As the online payments space is reaching a moment of key innovation and evolution, PSPs have to combine the need for a transparent and efficient communication strategy for their increasingly widening customer base and the necessity to be front-runners in providing new transaction methods to make sure that their customers will remain competitive.

Merchants will keep on searching for newer and better forms of payment in conjunction with the more traditional options. For this reason, PSPs need to guide them through the possible complications and help them set up fitting safeguards to guarantee the integrity of their transactions and their business.


As new technologies and models are created (which are often also used by financial criminals) and new regulations are being implemented, changes in fraud types and fraudulent behaviors are inevitable. This is truer than ever with the implementation of Strong Customer Authentication (SCA) through the PSD2 directives. It is therefore necessary for the iGaming industry to be aware of what the risk management solutions are and of how they can tackle the arising issues, especially through risk-scoring.

Many consumers are deterred from opening an account on an iGaming product via a mobile device because they are concerned about the security of their information. At the same time, new iGaming products are constantly arriving on the market, creating more competition than ever and increasing player expectations. It is now more than ever essential to combine a high level of security and a seamless player experience.