Extension on Strong Customer Authentication Changes Welcomed by UK Banks

A six-month extension to implement Strong Customer Authentication (SCA) for e-commerce transactions has been welcomed by UK banks.

According to a poll conducted by the global data and analytics company LexisNexis Risk Solutions, 42% plan to use the extension to improve and enhance the sophistication of their SCA rollout plans.

The poll, conducted during a UK Finance webinar entitled ‘Addressing CNP Fraud in 2021: A Deep Dive into the Anatomy of a Payment Journey’ and attended by nearly 500 UK financial services professionals, reveals that UK financial services plan to utilise the SCA deadline extension to March 2022 to enhance their PSD2 strategy.

“The results from the poll were very interesting,” comments Dan Holmes, Solutions Director at LexisNexis Risk Solutions. “They suggested that some issuers are pressing on with SCA compliance, while others remain cautious – leveraging the extra time given by the deadline extension suggests that issuers may have been preparing to do the minimum to meet requirements, and then build-out post-September. They will now however take advantage of the extension to improve delivery sophistication.

“Behavioural Biometric Authentication is a good example of what can be done with this extra time, as it buys more time for things like profile baselining, an essential component of biometric authentication. On behavioural biometrics specifically, however, what the poll results really show us is the uncertainty around SCA compliance and a potential gap in who defines what a ‘compliant’ authentication strategy is – as well as what parameters this should be set within.”

The poll also asked respondents how their organisation shared fraud risk intelligence across the online customer journey. Only a minority (12%) indicated that they did share intelligence across all areas of their customer journey, suggesting that some financial services organisations may be wasting an opportunity when it comes to leveraging intelligence in remote payment channels.

Dan continues, “Financial Services organisations must leverage the defences or intelligence available from other parts of their business for their remote purchase channels. If you are already looking at device intelligence or utilising digital identity in one area of your business, then use those capabilities to assess fraud in your remote purchase channels.

“As well as ensuring the effective sharing of risk intelligence across the entire customer journey, financial services organisations must assess how innovative solutions, which tap into specific data like behavioural biometrics, can help them to improve their ability to authenticate customers effectively without causing additional friction or checkout abandonment.”

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