AUGUST - 20198IN MY OPINIONInnovation Exposes Payment VulnerabilitiesInnovations in technology are permeating almost every aspect of our lives, from how we communicate with friends and family, navigate in cars, read books, make purchases and much more. Not only do technology innovations impact us personally, but they can also have broad societal impacts that go undetected for years. For instance, who could have predicted the use of Facebook by hostile foreign agents attempting to influence election outcomes? This is just one example of many illustrating how innovation that provides great personal and commercial benefits can also be applied maliciously at the expense of society. Unfortunately, banking and payments are not immune to harmful applications of new technologies. We are just now recognizing the scale of the vulnerabilities exposed and the actions required mitigating attacks that exploit technology innovation.What innovations are the root causes of most of the payment fraud challenges we face today? The Internet is the most obvious one. The Internet has increased both system to system and email connectivity among businesses. It has also enabled greater connectivity among individuals through email and social media applications like Facebook, LinkedIn and Twitter. This enhanced connectivity has provided innumerable benefits to business and society as whole, but it has also empowered criminal elements searching for ways to penetrate your systems and steal valuable payments and personal identifiable information (PII) that can be used to commit payment fraud.The primary vulnerabilities exposed by the Internet are twofold: first, system and data By Guy Berg, Vice President, Payments, Standards, and Outreach Group, Federal Reserve Bank of Minneapolis
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