As we published our 2024 Finance Trends report, three topics of high concern for finance & treasury leaders emerged:
- APP fraud
- Artificial intelligence
- Operational resilience
We wanted to get the experts in to share their insights on how to navigate these major trends in the regulatory & financial landscape. AccessPay CEO Anish Kapoor joined Jessica Cath and Lorraine Mouat from award-winning compliance consultancy Thistle Initiatives, to discuss.
Our Speakers:
APP fraud
The threat of APP fraud seems to be, unfortunately, looming larger and larger every year.
APP, or Authorised Push Payment, fraud is perpetrated when somebody is tricked into sending a payment under false pretences. As one of the most common types of fraud levelled at businesses and individuals (£239.3 million was lost in just the first half of last year), preventing it is a key remedial task for finance departments in the corporate world.
45% of businesses identified fraud prevention as a key challenge in 2024
Anish Kapoor – Founder of AccessPay:
Defending against APP fraud is about having multi-layered controls, specifically three main levels:
- Access – who can access your payment portals?
- Approvals – who’s checking payments as they’re made?
- Audit – are access & approvals working and are we catching any anomalies that slip through?
The core of APP fraud is that you’re initiating a payment to a beneficiary you know and trust, but the bank details are for somebody else. One of our latest features, Confirmation of Payee, tackles this at the very first stage – by flagging quickly and clearly whether the details you’ve entered match the details on file.
Jessica Cath – Head of Financial Crime (Thistle Initiatives):
For FIs and FinServs, it’s important to educate your customers on the threat of APP fraud too. How can you build awareness for your customers so they can recognise what’s genuine, and what isn’t?
This is even more important this year because, on 7th October, the new APP fraud mandatory reimbursement requirements will come into action for payment firms.
So if you don’t get it right, you’re going to get hit with a lot of reimbursement fees. Here’s what we’re advising our clients to do:
- Understand what your APP fraud typologies look like and make sure your monitoring is effective and appropriate for the type of APP fraud you’ll be targeted with.
- Employ customer awareness campaigns to raise awareness at the first stage of this fraud and put less strain on your controls.
- Make sure you can operationally handle the new requirements. Do you have enough staff to process requests? Do you have systems that can manage these?
Artificial Intelligence
AI is changing the business world sector-by-sector at an almost universal level. It’s a huge topic on the horizon for most finance firms, but it’s not yet part of their realities. We’re predicting that will change quite rapidly and quite soon, because financial criminals are already using it as part of their everyday activity.
Only 5% of respondents are currently trying to integrate AI into workflows.
Anish Kapoor – Founder of AccessPay
- The main use case we’ve found for AI is fraud and error detection. AI is excellent at spotting patterns and highlighting anomalies, which is why we’ve added it into our Payment Screening tool. It’s hard for humans to process big lists of numbers, but it’s very easy for algorithms and AI.
Jessica Cath – Head of Financial Crime (Thistle Initiatives)
If you’d have asked me about AI in financial crime last year, I’d say it was more hype than reality. But this year, it’s quite different. We’re facing a lot more AI challenges, like:
- Deepfakes are becoming more common and more sophisticated – where criminals use AI to create very convincing audio or video impersonations of somebody.
- Phishing has levelled up, with ChatGPT making light work of producing hard-to-spot impersonations of real branded emails.
- Voice cloning, like deepfakes, is becoming easier and more accessible. This is particularly concerning for technology like MVMP (My Voice is My Password), but also on the human side too. Criminals are now able to simulate a realistic enough audio impersonation that there have been cases of parents being tricked by their fake children’s voices over the phone.
As a society, not just in financial services, we need to upskill on how to recognise AI in everyday life.
Operational resilience
Ooperational resilience is becoming even more important in the face of relentless digital evolution (not to mention UK SOx’s imminent arrival.) As a collection of policies, tools, and tactics – it can sometimes be an unsung hero in finance meetings. But from what we’re seeing, it’s going to be working its way up the agenda sooner rather than later.
Operational resilience was 3rd in drivers for digital transformation
Lorraine Mouat – Head of Payment Services (Thistle Initiatives)
For strong operational resilience, you need to become like a digital explorer. You need to dive into every corner of your business and find out exactly how it all works and how it can all go wrong. That’s what creates a dynamic and adaptable approach. Get stuck in.
Scenario planning and stress testing allow you to simulate diverse and disruptive events that get you ready for any challenges. Good cyber security stance, regular audits, threat detection. Awareness and preparedness at every level throughout the organisation. And, of course, continuous improvements – learn from incidents, refine those resilience strategies, and stay ahead of emerging threats and technological advancements.
Anish Kapoor – Founder of AccessPay
Operational resilience sits at the heart of UK SOx compliance. But it’s not going to be anything like US SOx was 20 years ago. We’re solving different problems now, and human controls with manual processes just won’t cut it. Automated systems already form an important part of operational resilience, but with UK SOx en route they’re going to become an absolute essential.
Lorraine Mouat – Head of Payment Services (Thistle Initiatives)
The response to UK SOx depends on the type of business, where it’s operating, and what its key services are. But I would advise my clients to prioritise tools that streamline processes and enhance operational efficiencies, like:
- Advanced analytics to help deliver data-driven insights and key resilience indicators.
- Forward looking tools, so you don’t just look at risk after the event.
- Automated solutions to reduce manual tasks.
- Cyber security technology to ensure integrity and security of fin operations.
- Cloud-based platforms and collaboration tools to optimise and enhance workflows.
And besides these three big challenges, we also asked our guests what they personally thought the most important focus should be for finance leaders in 2024.
To hear their answers, and for much more detail on the topics discussed in this article, you can watch the webinar on-demand at any time: https://pages.accesspay.com/knowledge-hub/events/2024-finance-trends
You can also download the 2024 Finance Trends report, to see our full range of predictions: https://pages.accesspay.com/knowledge/finance-trends-report/2024
