As the payments industry evolves, organizations need to be aware of the trends they will face in the coming years. A particularly important trend that has emerged over time is the increasing importance of data management.
To learn more about the major trends payment organizations should be prepared to face in 2022, PaymentsJournal sat down with Ron Teicher, Co-founder and President of EverC, and Don Apgar, Director of Merchant Services Advisory Service at Mercator Advisory Group.
Macro trends in the payments industry
According to Teicher, the major trend EverC sees in the online payments ecosystem is the proliferation of data. More specifically, the increase in digital transactions are creating billions of bytes of data on businesses participating in both legitimate and illegitimate online activity. This proliferation of data presents both a great opportunity and certain challenges for payments organizations looking to grow their portfolios..
On one hand, bad actors are exceptionally good at using the increasing speed of data connections and hiding with anonymity behind intermediaries. On the other hand, data has the potential to greatly enhance visibility into online criminal activity. If companies can harness, synthesize, and analyze data, they can use it to address against financial crime and reduce their risk.
“If you don’t have the capability to process this data, it’s going to be very easy for the bad actors to hide inside this endless amount of data. The plus side is that if you do have the power to synthesize data, then the visibility that you’re able to get today supersedes everything we were able to see in the past, and that [can] help in all sorts of different ways in terms of business enablement, fighting crime and fraud, and so on,” explained Teicher.
But it can be difficult to hone in on the data that matters. “If you’re not looking at the right things because you’ve got too much data, it’s almost as bad as having no data at all,” noted Apgar. Recognizing this, EverC has created proprietary tools that cull the data, synthesize it, and develop actionable insights on risks that were previously unknown.
The importance of the integrity of data
As businesses increasingly rely on data for decision-making, data integrity—the accuracy and consistency of data—has become more important than ever before. “If something goes wrong with your data integrity, then that’s going to create a whole lot of serious operational problems. Data integrity has been, but even more so today, critical for the smooth operation of businesses,” said Teicher.
That’s why EverC’s proprietary tools only provide companies with data it knows is credible. “The information provided is only [that which] went through an endless number of filters and controls to make sure that is actionable to the end user,” he added. A key part of data integrity is having up-to-date information. Data is a living, breathing entity, so continuous monitoring and analysis is crucial. With the aid of modern-day AI and machine learning, such ongoing monitoring is possible.
“Oftentimes, organizations rely on insights from companies who aggregate offline databases. Because of the lack of freshness of data, they make their choices based on not-so-accurate data. That’s where adding information from the biggest and most dynamic database in the world, which is the internet, to supplement these data points from traditional sources is crucial in today’s world,” explained Teicher.
Apgar agreed, adding that “in today’s digital world, even checking your risk policy every six months is too long. You’re way behind the curve, and the only way to keep up with it is to do it dynamically the way [EverC] is.”
Micro trends in the payments industry
The gaming industry
When asked about micro-trends in the payments ecosystem, Teicher shifted his focus to the niche gaming industry. “A niche trend we are seeing is bad actors running gaming operations as a subset of other companies. This is an example of one of our primary use cases for laundering happening through an unknown party,” he said.
Contributing to the complexity of the gaming industry is the fact that regulations vary widely from place to place. While the high-risk space is enticing to payments companies, balancing regulatory compliance and other concerns will need to remain top of mind. “Being able to determine who is of age and eligible to receive and send money and know where it’s coming in and where it’s going is going to be a whole other challenge outside of the regulatory environment for casinos,” said Apgar.
The Pandora Papers
Worth noting is the significance of the Pandora Papers. The Pandora Papers are nearly 12 million documents that were leaked by the International Consortium of Investigative Journalists starting on October 3, 2021. The leak exposed secret offshore accounts of 35 world leaders and over 100 business leaders, billionaires, and celebrities.
The leak stands as a powerful example of the sheer magnitude of financial secrecy. “It’s an illustration of what people are doing to hide their assets,” said Teicher. “If these people are using it, the really bad people are too. And what’s scary is that the ease of the ability to do that today is so much greater,” noted Teicher.
Connecting the dots when it comes to data
The payments industry needs to have the ability to analyze data to uncover risks and connect the dots between different online entities. Modern technology makes that possible.
“If you tried to make a physical crime board, like we see on TV, of the internet, it’s too much data. You couldn’t physically do it. It’s only with the power of the bot and machine learning that has the computing power to understand all of those relationships and distill them down into the salient points that we as humans can visualize,” Teicher concluded.
EverC is a global leader in cyber intelligence for merchant risk and compliance. EverC MerchantView™ is a next generation automated solution for merchant onboarding that helps organizations grow their portfolio and keep customers happy. For more information, download the e-book, “Accelerate your underwriting without sacrificing due diligence.”
