We always enjoy a good event; that’s where we meet industry peers, share ideas, and learn about new trends and developments within this constantly changing sector. Last November, we had the pleasure of attending RiskConnect, a two-day event focused on risk management and payments organized by Web Shield in Frankfurt. As we’re a big fan of industry knowledge sharing, here’s our video report covering the event highlights.
The first day started with a basic, yet critical question: how do we survive in the new risk environment? The answer is clear: by staying connected with industry peers. We would identify this later on as a common topic being brought up in most of the presentations.
With the business sector being more dynamic than ever, how can we keep up with everything that is going on?
By paying attention, analyzing and understanding what is going on all around us, not just within our own field.
Understanding and managing risk
Before going into detail about risk and payments trends, we have to understand risk and the proper way to manage it. As we understood from different sessions, we have to take risks, otherwise “we wouldn’t have any transactions”, as explained by Kevin Smith from RiskSkill.
The trick lies in the way we assess and successfully manage risk. Getting a complete understanding of risks requires deep learning from many different industries, followed by taking the right decisions based on the particular case we find ourselves in.
So what’s the recipe for success? It starts by making use of best practices, such as truly getting to know each business to understand its type and the risks that come with it. Smith also pointed out that at the same time, we find ourselves in a privileged position, as “risk management is a differentiator for business done right”.
The governing role of tech
With technology being a major game-changer in every industry, it’s obvious that it has been greatly impacting risk management as well. As it turns out, the risk sector currently looks exactly what it looked like ten years ago. The difference lies merely in the methods we use to manage it as nowadays, risk management efforts are significantly supported by technology.
With the technology advances, “we got more data, more sophisticated systems” as indicated by Peter Bayley from Visa. The level of risk in the industry has decreased, enabling safer, higher quality and more effective transactions.
On the other hand, fraudsters are adapting to the new tech trends, coming up with more sophisticated approaches as well. As Jason Thomas from Thomson Reuters Special Services argued, technology is amoral; it can be both positive and negative at the same time; connected devices are a good example. They allow us to identify ourselves and make payments more quickly, but the same increase in speed also supports all sorts of illegal activities.
Asked where they see risk management going towards, our speakers mentioned artificial intelligence (AI) and machine learning as playing key roles in the future. In particular, AI and machine learning are promising for the industry, mainly because they improve and speed up the way investigations are carried out by risk analysts. This enables risk managers to carry out multiple investigations with equal detail and depth simultaneously, ensuring a continuous framework in regards to risk assessments.
AI will take risk management to the next level, however, we have to understand that it’s still humans, underwriters and risk professionals that have to work with the technology; its mere presence does not overcome the challenges in risk management.
Trends and challenges
One of the most worrying trends that kept coming up during the conference was deceptive marketing. Simply put, merchant acquirers often encounter perfectly compliant businesses that use their marketing approach in a very deceptive way. As Christian Chmiel from Web Shield explained: “that is the deciding factor [as to] whether it’s an honest merchant or not”.
Moreover, what we also see nowadays is fraudsters moving from one industry to another, depending on the business categories that become easier to approve by merchant acquirers.
Card associations warn us that the day-to-day processes in risk management such as proper due diligence still pose challenges for merchant acquirers. These refer to both initial and ongoing monitoring that needs to be in place once merchants progress through the system.
During a panel discussion, a very interesting question was raised about payments – are we a trusted industry? The conclusion: we’re not necessarily understood as an industry by end consumers due to the fact that we’re more on the backstage of shopping journeys. However, everything happening backstage is always crucial to all spotlight activity. This makes us wonder: do we need to raise awareness about what happens behind the scenes? Perhaps an open discussion with end consumers would help the payments industry to discover consumer pain points before they even take shape.
The running theme of RiskConnect
The theme that kept on repeating throughout the event was collective intelligence. Over and over again, speakers emphasized the need for risk professionals to connect, share knowledge and discuss challenges to help each other manage risk successfully. In fact, the speakers encouraged open communication and close contact with competitors as well, urging everyone in the industry to learn from each other the different approaches to fight fraud and manage risks. As our CEO, Rudolf Booker, explained: “problems encountered by peers today could be your problems tomorrow”.
We truly enjoyed the event for its ability to bring such a great variety of professionals together, share best practices on diverse topics and encourage further discussion.
Looking forward to the 2018 edition of RiskConnect!