Decoding the top trends in identity and payments
In a recent lively webinar, Yaspa’s CEO James Neville joined Jason Howard, CEO of Caf, to discuss the hottest trends in identity, payments, and fraud prevention for 2025, separating the truly groundbreaking from mere buzzword bingo. Here's a recap of their key insights and contrasting perspectives for each of the topics discussed.
Embedded payments and finance
Both panellists were bullish on the continued evolution of embedded payments and finance, emphasising the drive towards seamless and frictionless transactions.
James viewed embedded finance as a natural progression towards simplifying payments, making them ubiquitous yet transparent. He thought that tokenisation and biometric authentication methods (a la Apple Pay) represent the future, eventually leading to payments that are triggered with minimal effort.
“The payment itself - it’s just a transaction. It’s a movement of some digits. Actually, the real value is the identity behind that transaction behind that money." - James Neville.
Jason agreed, viewing embedded finance as the next stage in the evolution of ecommerce and mobile payments, driven by the increasing adoption of mobile-first economies in developing markets. He highlighted the need for technology to address security and consumer convenience as subscription-based models proliferate.
While both were positive about the overall trend, James raised concerns about the potential negative impacts of embedded finance. He pointed to Buy Now Pay Later (BNPL) models as a potential source of credit challenges, particularly for younger generations who may be unaware of the accumulating debt.
Personalisation in payments
While James and Jason acknowledged the potential of AI-driven personalisation, they differed in their levels of optimism.
Jason was bullish on the potential of AI to personalise payment experiences, drawing parallels with the success of personalised advertising and targeted recommendations in ecommerce. However, he cautioned against overwhelming consumers with too many options, emphasising the need for a balanced approach that prioritises user convenience.
James was more cautious, suggesting that true personalisation required deeper insights into a user's financial behaviour and demographics, which current payment systems lack. He believed that while AI could enhance recommendations within specific contexts, achieving a holistic understanding of a user's preferences required access to a broader range of financial data.
Fraud-as-a-Service
Both panellists acknowledged Fraud-as-a-Service (FaaS) as a growing concern, tracing its roots back to earlier forms of online criminal collaboration and highlighted how the internet has made these activities more accessible and sophisticated. They agreed that the increasing availability of FaaS tools and services presented a significant challenge for businesses and consumers alike.
Jason saw the challenge as a perpetual cat-and-mouse game, where technology empowers both sides. He emphasised the need for greater collaboration and data sharing within the industry to combat increasingly sophisticated fraud techniques. He believed that by adopting a more unified approach, organisations can better leverage technology and intelligence sharing to counter the evolving tactics of fraudsters.
James agreed, pointing out the ease with which fraudsters access tools and resources online, from accessing phishing and hacking tools to buying credit card details on the dark web. He highlighted the limitations of current fraud prevention measures, particularly the siloed nature of data within the banking industry. He believed that greater transparency and data sharing are essential to effectively combat the evolving landscape of FaaS offerings.
Generative AI and fraud prevention
There was cautious optimism from both panellists about the impact of generative AI on fraud prevention, acknowledging its potential and the challenges it presents.
Jason recognised the revolutionary potential of AI but expressed concern about the rapid pace of change and the ability of organisations to adapt. He anticipated that fraudsters would initially exploit AI's capabilities faster than security professionals could develop countermeasures, leading to a period of catch-up for the industry. However, he remained optimistic that technology will eventually provide effective solutions to mitigate AI-driven fraud.
“There’s always been a community of fraudsters that have collaborated and kind of worked together... the internet has just made that more accessible. All AI does is just the next generation of technology that enables it, and it enables the good guys and it enables the bad guys.” - Jason Howard
James agreed that generative AI creates an arms race between fraudsters and fraud prevention efforts. However, he noted that there were already businesses actively working to detect deepfakes and AI-generated content, suggesting that tools for defence are emerging. He believed that this technological battle would lead to an "equal suite of weapons" for both sides.
Real-time payments
Both panellists were bullish on the future of real-time payments while acknowledging the increased fraud risks associated with instant transactions.
James, while recognising the convenience and speed offered by real-time payments, cautioned that faster transactions also facilitate faster fraud. He advocated for robust security measures, particularly strong customer authentication using biometrics, to mitigate the risks associated with instant payment systems. Most real-time payment platforms have these security mechanisms built-in as default, but as James pointed out, the traditional card-based payment system lacks robust identity verification, making them more susceptible to fraud.
Jason echoed this sentiment, highlighting the success of real-time payment systems like Pix in Brazil while emphasising the need for enhanced identity verification and consumer protection measures. He believed that technology would play a crucial role in securing real-time transactions and mitigating the potential for fraud.
Self-Sovereign Identity
Self-Sovereign Identity (SSI), a concept that envisions individuals having complete control over their personal data and how it is shared, eliminating the need for central authorities or intermediaries, sparked a clear divide, with Jason seeing potential in the concept while James dismissed it as impractical.
Jason, while not explicitly endorsing SSI, focussed on user control over data and the importance of secure identity management, which aligns with SSI principles. He believed that identity would be central to the future of payments, enabling personalised and secure experiences.
James was highly sceptical of SSI, arguing that the complexity of managing personal data and cryptographic keys would deter widespread adoption. He believed that consumers lacked the motivation and technical expertise to manage their identities effectively, making centralised identity solutions more viable. He considered SSI a "BS trend", unlikely to gain traction.
"Nobody cares enough to self-manage their own identity. Privacy is a fallacy online. We all know it's driven by data. Everyone's come to accept that." - James Neville.
Decentralised identity
Similar to SSI, decentralised identity aims to give individuals more control over their digital identities by distributing data across multiple systems rather than relying on central authorities. The panellists expressed reservations about decentralised identity systems in their entirety but saw potential in decentralised applications for specific use cases.
Jason differentiated between decentralised identity and decentralised data applications, supporting the latter. He saw value in decentralised applications for facilitating data sharing and collaboration between organisations to improve identity verification and risk assessment processes.
James saw potential in tokenised identity, where individuals can selectively share specific aspects of their identity with trusted entities. He believed this approach offered a more practical and secure alternative to fully decentralised identity systems.
Convergence of fraud, security, and financial crime
Both James and Jason believed that the concept of a complete convergence of fraud, security, and financial crime was unrealistic, primarily due to organisational silos and the specialised nature of these areas.
Jason dismissed the idea as "BS", pointing to the continued existence of separate departments and budgetary considerations within organisations that hinder a unified approach to tackling financial crime.
James agreed, emphasising that different industries faced distinct types of financial crime, necessitating specialised expertise and approaches. He believed that the complexity and scale of financial crime warranted a more targeted approach, tailored to specific industry sectors and organisational structures.
Biometrics and privacy
Both panellists acknowledged the benefits and risks associated with biometrics, advocating for responsible implementation and robust security measures to balance convenience with privacy.
Jason believed that biometrics were "here to stay", citing their effectiveness in enhancing security. He acknowledged the privacy concerns but trusted that industry and regulators would find ways to mitigate risks through technological advancements and appropriate safeguards.
James distinguished between "shared biometrics" and "on-device biometrics", expressing greater comfort with the latter due to the enhanced security and privacy protections offered by modern devices. He remained cautious about the potential misuse of shared biometrics, emphasising the need for transparency, user consent, and clear regulations.
Key takeaways
The discussion highlighted the complex and evolving landscape of identity, payments, and fraud prevention. While technology offers exciting possibilities for enhancing security and convenience, it also introduces new challenges and requires careful consideration of ethical implications. The panellists' insights underscored the importance of:
- Collaboration and data sharing: Breaking down silos between organisations and departments was seen as crucial for effectively combating fraud and financial crime.
- Balancing security and privacy: Responsible implementation of technologies like biometrics is essential to ensure that security enhancements do not come at the expense of user privacy.
- Critical evaluation of emerging trends: Not all buzzwords represent genuine innovation, and it's important to critically assess the viability and potential impact of emerging technologies before embracing them.
Hungry for more? Sit back and watch the full webinar replay
