Issuers Adapt to Economic Challenges by Focusing on Risk Management and Innovation

In a recent interview with PYMNTS, Seth Perlman, the global head of product at payment processor i2c, discussed the evolving landscape for financial institutions (FIs) amidst ongoing economic challenges. Perlman, who brings a wealth of experience from companies like Visa, Fiserv, and PayPal, highlighted the prolonged nature of high inflation and an inverted yield curve as key challenges facing FIs.

«Financial institutions know how to handle changing interest rates, inflation, and some of these macro trends,» Perlman noted. «But what’s been very different recently has been the prolonged nature of inflation staying high and the yield curve staying inverted. So those trends have created a few challenges for financial institutions in terms of how to adapt to those circumstances that usually don’t last that long in the market.»

To address these challenges, Perlman emphasized the importance of issuers focusing on risk management, proper product pricing, and forecasting. He highlighted the need for FIs to invest in technology, prioritize security and risk management, and stay ahead of innovation.

On the technology front, Perlman encouraged issuers to embrace AI and real-time payment systems, emphasizing the importance of reimagining the customer experience. He noted that digital wallets are part of the new technology set that can help FIs meet customer needs and stay competitive.

In combating fraud, Perlman identified account-opening fraud and transaction-related fraud as primary areas of concern. To address these risks, i2c has invested in advanced fraud detection algorithms and AI technology to detect and prevent fraud in real-time.

Looking ahead, Perlman emphasized the need for issuers to stay ahead of innovation, particularly in areas like connected devices. He highlighted the impact of connected devices on the car-charging environment and how electric cars will drive changes to the payments ecosystem.

«We need to think more broadly about where payments innovation is happening,» Perlman said. «All will have some impact on everyone in the payments ecosystem.»

By focusing on risk management and innovation, FIs can navigate the current economic challenges and provide seamless digital experiences for their customers.

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