EXCLUSIVE—As banks begin to implement faster payment networks, they have to be ready to react to new cases of fraud in higher numbers, Genevieve Gimbert, head of fraud management consulting for financial consultancy PwC told Bank Innovation.

“Faster payments has created new payment networks that have increased the competition between services,” Gimbert told Bank Innovation. “This creates challenges, because with traditional payments, you have time to see if something is suspicious or fraudulent. With faster payments, you have very limited to no time.”

Faster payments, while it provides obvious benefits in speed and efficiency for both banks and consumers, thus comes with a huge increase for fraud: when the faster payments network was implemented in the United Kingdom, financial services institutions saw a 300% increase in fraud, Gimbert said.

“We are probably going to see something similar in the U.S.,” Gimbert said. “Even with the Zelle implementation last year, we saw [problems]—we have clients that reported a 90% fraud rate after Zelle.”

Gimbert was unable to share any of these clients by name. Over 30 U.S. banks currently support the Zelle payment network created by Early Warning, including Bank of America, Ally Bank, Capital One, and JPMorgan Chase. These comments come after other reports on rising fraud on the Zelle network have emerged, including scams where fraudsters set up bank accounts at Zelle-supported banks to receive the funds users send them for fake goods or services.

What’s emerging in fraud, according to Gimbert, is this increase in “account takeover through social engineering,” where fraudsters are relying on a combination of free data on social media and data purchased on the Dark Web (where it’s available with increasing ease, Gimbert said) to take over accounts.

“The fraudsters are calling the call centers to get more information about a customer’s account or change account information to take over the customer’s account” Gimbert said. “Account takeover is the biggest issue across the board [for banks].”

Fraudsters, who rely on a combination of factors to hack an account, can easily get around verification methods like email, text messages or home address by calling a financial institution’s call center with just the right amount of that user’s personal data, Gimbert said. To counter this, banks need to move to better forms of authentication, like biometrics.

“A lot of FIs still have knowledge-based authentication, so they need to implement a more [secure] way of authenticating customers through biometrics,” Gimbert said. “Whether it’s fingerprint, voice, or facial ID, and [they need] to implement real time fraud detection and monitoring of monetary transactions and non-monetary customer interactions.”

To learn more about faster payments and fraud management, join us on March 5-6, 2018 at the Parc 55 in San Francisco for Bank Innovation 2018. Click here to register.