1 00:00:05,600 --> 00:00:07,920 Speaker 1: Welcome to the Fear and Greed Business Interview. I'm sure 2 00:00:08,039 --> 00:00:11,520 Speaker 1: Ailma more than nine in ten Australians have been personally 3 00:00:11,560 --> 00:00:15,160 Speaker 1: targeted by fraudsters, and one third of us are aware 4 00:00:15,200 --> 00:00:18,600 Speaker 1: of our personal details being compromised in a data breach, 5 00:00:19,040 --> 00:00:22,960 Speaker 1: so it's perhaps understandable that consumers are wary about handing 6 00:00:23,000 --> 00:00:27,240 Speaker 1: over their data online. The challenge for SMBs, particularly in 7 00:00:27,320 --> 00:00:30,280 Speaker 1: e commerce for example, is to make security a top 8 00:00:30,320 --> 00:00:34,839 Speaker 1: priority while also delivering a smooth, easy customer experience. Daniella 9 00:00:34,920 --> 00:00:38,560 Speaker 1: Fernandez is the head of Information Security at PayPal, Australian 10 00:00:38,840 --> 00:00:41,880 Speaker 1: a great supporter of this podcast. Danieller is speaking today 11 00:00:41,960 --> 00:00:45,360 Speaker 1: at the PayPal Connect event in Sydney, highlighting some of 12 00:00:45,400 --> 00:00:48,199 Speaker 1: the research PayPal has done into the way scams and 13 00:00:48,240 --> 00:00:52,760 Speaker 1: fraudulent behavior is evolving and how businesses can protect themselves. Daniella, 14 00:00:52,840 --> 00:00:53,880 Speaker 1: Welcome to Fear and Greed. 15 00:00:54,400 --> 00:00:56,320 Speaker 2: Has Jean great to be here. 16 00:00:56,680 --> 00:01:01,720 Speaker 1: From a consumer side? First, what does the scam look like? 17 00:01:01,800 --> 00:01:02,640 Speaker 1: How are they evolving? 18 00:01:03,560 --> 00:01:08,440 Speaker 2: It's a great questions. Cams today are more sophisticated and 19 00:01:08,560 --> 00:01:12,640 Speaker 2: tailored than ever before. In terms of trends, we've seen 20 00:01:12,680 --> 00:01:16,440 Speaker 2: an increased interest from an industry and government fighting fraud 21 00:01:16,520 --> 00:01:20,880 Speaker 2: and scams. According to Day Triple C in twenty twenty three, 22 00:01:20,920 --> 00:01:24,600 Speaker 2: Australian's laws two point seventy four billion dollars to scams. 23 00:01:25,000 --> 00:01:29,120 Speaker 2: So it is a profitable business and bad actors use 24 00:01:29,160 --> 00:01:33,760 Speaker 2: a rune of tactics to target different people. So how 25 00:01:33,800 --> 00:01:38,120 Speaker 2: does it look like the traditional vision emails to investment 26 00:01:38,400 --> 00:01:42,959 Speaker 2: camps which are very common these days, tricking people into 27 00:01:43,360 --> 00:01:49,160 Speaker 2: fake stock investments, leading individuals to believed they are making 28 00:01:49,280 --> 00:01:54,280 Speaker 2: real profits to later discover their money is gone. Another 29 00:01:54,320 --> 00:01:58,120 Speaker 2: common one from a consumer side, I would say what 30 00:01:58,200 --> 00:02:03,160 Speaker 2: we call romans scamps are particularly targeting all their Australians 31 00:02:03,520 --> 00:02:08,000 Speaker 2: and then the typical you know, parcels that haven't been delivered, 32 00:02:08,560 --> 00:02:12,079 Speaker 2: subscription renewals and also fake invoices. 33 00:02:12,800 --> 00:02:16,160 Speaker 1: What's the difference between fraudulent behavior and scams? 34 00:02:16,760 --> 00:02:19,480 Speaker 2: Yes, scams is a type of fraud, but the key 35 00:02:19,520 --> 00:02:26,120 Speaker 2: difference is that scams trict the user into providing information 36 00:02:26,240 --> 00:02:29,400 Speaker 2: so it looks like a legitimate transaction and it's difficult 37 00:02:29,400 --> 00:02:34,600 Speaker 2: to dispute with some of you know, the traditional organizations 38 00:02:34,680 --> 00:02:38,960 Speaker 2: because fraud, in the other hand, it's something where the 39 00:02:39,400 --> 00:02:44,519 Speaker 2: actual platform has been compromised and it's able to commit 40 00:02:45,040 --> 00:02:46,320 Speaker 2: the type of transaction. 41 00:02:47,040 --> 00:02:50,040 Speaker 1: Who's doing mass of these scams, Who's behind them? 42 00:02:50,639 --> 00:02:56,120 Speaker 2: It ranges. The scammers can be criminal organizations that are 43 00:02:56,320 --> 00:03:00,360 Speaker 2: very large, it can be just people that are taking 44 00:03:00,360 --> 00:03:03,680 Speaker 2: the opportunity. And the thing is that scammers are targeting 45 00:03:03,720 --> 00:03:09,000 Speaker 2: pretty much everyone. If we looked at some of the patterns, 46 00:03:09,520 --> 00:03:13,440 Speaker 2: something that we have identified is that they tend to 47 00:03:13,480 --> 00:03:17,399 Speaker 2: focus on people that are not digital saving so for example, 48 00:03:18,160 --> 00:03:22,840 Speaker 2: all their generations as well as children. They tend to 49 00:03:23,080 --> 00:03:29,040 Speaker 2: also manipulate the challenges of linguistic you know, people from 50 00:03:29,040 --> 00:03:34,440 Speaker 2: different demographics that potentially are more more prompe for those scams. 51 00:03:35,320 --> 00:03:38,400 Speaker 1: Okay, so let's move to the merchant perspective. The cost 52 00:03:38,440 --> 00:03:41,480 Speaker 1: of living crisis mainly small and many sized businesses are 53 00:03:41,520 --> 00:03:43,760 Speaker 1: working really hard to attract customers. They have to they 54 00:03:43,800 --> 00:03:47,440 Speaker 1: can't afford to lose money to fraud and scams. How 55 00:03:47,480 --> 00:03:51,800 Speaker 1: big a problem is it on the merchant side. 56 00:03:51,000 --> 00:03:55,640 Speaker 2: Yeah, it definitely matters for small medium businesses because there 57 00:03:55,680 --> 00:03:58,400 Speaker 2: are a good target as they do not have the 58 00:03:58,440 --> 00:04:03,320 Speaker 2: same resources as large enterprises to invest in security protections 59 00:04:03,360 --> 00:04:08,000 Speaker 2: and detection tools. And of course, the financial reputational impact 60 00:04:08,160 --> 00:04:11,360 Speaker 2: of a single scam or a data bridge can be 61 00:04:11,440 --> 00:04:17,360 Speaker 2: pretty staggering for SMBs merchants. Last year's Cyber Trail Report 62 00:04:17,720 --> 00:04:21,760 Speaker 2: published by the Australian Signals Directorate showed that the average 63 00:04:21,800 --> 00:04:25,400 Speaker 2: cost of cyber crime for small businesses was around forty 64 00:04:25,400 --> 00:04:29,200 Speaker 2: six thousand dollars pair incidents. So if we think about 65 00:04:29,839 --> 00:04:34,840 Speaker 2: SMBs operating on tied budgets, these kinds of losses can 66 00:04:34,920 --> 00:04:39,800 Speaker 2: really hurt get into potential layoffs or tewing down the 67 00:04:39,839 --> 00:04:44,640 Speaker 2: business altogether. And from a reputational risk perspective, if a 68 00:04:44,680 --> 00:04:47,960 Speaker 2: business falls victim to a scam, that impacts the reputation 69 00:04:48,720 --> 00:04:51,239 Speaker 2: a lot. And on top of that, when an SMB 70 00:04:51,400 --> 00:04:55,919 Speaker 2: falls victim of a scam, there could also be a 71 00:04:56,000 --> 00:04:59,840 Speaker 2: huge impact on the disruption of the business comes trying 72 00:04:59,880 --> 00:05:04,040 Speaker 2: to recover from the incident, taking away resources, for example, 73 00:05:04,040 --> 00:05:07,040 Speaker 2: from day to day running of the business itself while 74 00:05:07,120 --> 00:05:09,760 Speaker 2: handling the aftermath of a scamp. 75 00:05:10,360 --> 00:05:12,200 Speaker 1: What are the types of scams that the people are 76 00:05:12,279 --> 00:05:15,400 Speaker 1: running against merchants at the moment, Yes. 77 00:05:15,440 --> 00:05:19,800 Speaker 2: The restaurant, as I mentioned before, the phishing emails for 78 00:05:19,920 --> 00:05:23,320 Speaker 2: fake invoices. One very common that we have seen is 79 00:05:23,320 --> 00:05:28,560 Speaker 2: what we call the business email compromise. So say in 80 00:05:28,560 --> 00:05:31,559 Speaker 2: this case when cammers are sneaking to an email threat 81 00:05:31,760 --> 00:05:36,839 Speaker 2: or impersonate a vendor and send fake invoices. Small businesses 82 00:05:37,040 --> 00:05:41,600 Speaker 2: manage a lot of invoices. If one fake slips through, 83 00:05:42,000 --> 00:05:47,159 Speaker 2: it can cost thousands before anyone notices. And with most 84 00:05:47,200 --> 00:05:50,760 Speaker 2: transactions happening now online, these scamps are happening more often. 85 00:05:51,120 --> 00:05:54,160 Speaker 2: Another classic is again, if we go back to phishing, 86 00:05:54,320 --> 00:05:58,640 Speaker 2: it seems like it's never going away. Cammers send emails 87 00:05:58,839 --> 00:06:02,760 Speaker 2: texts Britain to be from trusted platforms, like say one 88 00:06:02,760 --> 00:06:05,839 Speaker 2: of their vendors, and they try to trig stuff into 89 00:06:05,960 --> 00:06:10,520 Speaker 2: sharing passwords or payments information, and all it takes is 90 00:06:11,240 --> 00:06:14,039 Speaker 2: one employee clicking the wrong link. 91 00:06:14,760 --> 00:06:19,679 Speaker 1: Stay with me, Danielle, We'll be back in a minute. 92 00:06:23,080 --> 00:06:27,080 Speaker 1: I'm speaking to Daniella Fernandez, head of Information Security at 93 00:06:27,080 --> 00:06:31,760 Speaker 1: PayPal Australia. Okay, so, one of the advantages of using 94 00:06:31,839 --> 00:06:35,120 Speaker 1: a platform like PayPal. Then, with all this is background, 95 00:06:35,440 --> 00:06:38,800 Speaker 1: and I'm a merchant, what's the advantage of using a 96 00:06:38,800 --> 00:06:39,800 Speaker 1: platform like yours? 97 00:06:40,560 --> 00:06:43,960 Speaker 2: Yes, particularly for PayPal, because people has a relationship with 98 00:06:44,080 --> 00:06:48,840 Speaker 2: both customers and merchants, and we operate in over two 99 00:06:48,960 --> 00:06:51,720 Speaker 2: hundred markets with an work cover of more than four 100 00:06:51,760 --> 00:06:56,359 Speaker 2: hundred million users or thirty million merchants globally. We have 101 00:06:56,440 --> 00:06:59,880 Speaker 2: a huge data set across our two sided networks. Are 102 00:07:00,040 --> 00:07:02,240 Speaker 2: we to see you know what merchants are doing as 103 00:07:02,279 --> 00:07:06,479 Speaker 2: well as consumers, and these help us to block payment 104 00:07:06,760 --> 00:07:12,360 Speaker 2: fraud and address online crime. Every customer transaction is monitoring 105 00:07:12,400 --> 00:07:16,520 Speaker 2: and heavily guarded behind our advanced encryption to help prevent 106 00:07:16,640 --> 00:07:22,000 Speaker 2: frol and identity theft, and particularly now with prez and 107 00:07:22,080 --> 00:07:24,800 Speaker 2: bins that have a present online if they use e 108 00:07:24,840 --> 00:07:30,320 Speaker 2: commerce platforms like PayPal that have protection dispute automation allowing 109 00:07:31,000 --> 00:07:35,320 Speaker 2: charge BUTD management across payment proseners and also something that 110 00:07:35,360 --> 00:07:39,480 Speaker 2: we call three D secure capabilities which allow merchants to 111 00:07:39,640 --> 00:07:44,760 Speaker 2: enable two factor authentication during transactions to help reduce fraud. 112 00:07:45,160 --> 00:07:50,600 Speaker 2: Also we three D secure through our PayPal Complete payments. 113 00:07:51,160 --> 00:07:55,360 Speaker 2: The liability for charge packs can be cheap from the 114 00:07:55,400 --> 00:07:58,160 Speaker 2: merchant to the car issue bank for example. 115 00:07:59,240 --> 00:08:01,560 Speaker 1: Okay, there's a lot in that. How do you think 116 00:08:01,600 --> 00:08:05,640 Speaker 1: businesses think they're doing? So what you makes What you say, 117 00:08:05,720 --> 00:08:08,800 Speaker 1: Daniel makes sense to me. But if I'm running a business, 118 00:08:08,840 --> 00:08:12,520 Speaker 1: do most businesses think they're doing the right thing? Or 119 00:08:12,880 --> 00:08:15,160 Speaker 1: is it something that bites them eventually? And they realize 120 00:08:15,160 --> 00:08:16,400 Speaker 1: they haven't been doing the right thing. 121 00:08:16,960 --> 00:08:20,840 Speaker 2: Yeah, So it's an interesting question, Seoan. There seems to 122 00:08:20,880 --> 00:08:25,680 Speaker 2: be a disconnect between consumer perceptions about how well businesses 123 00:08:25,760 --> 00:08:30,520 Speaker 2: can protect them online and how actually business feel they 124 00:08:30,520 --> 00:08:33,080 Speaker 2: are doing in this regard. So, based on our research, 125 00:08:33,920 --> 00:08:37,679 Speaker 2: only twenty eight percent of Australian consumers believe that Australian 126 00:08:37,720 --> 00:08:42,880 Speaker 2: businesses can keep their data safe well. On the other side, 127 00:08:43,000 --> 00:08:46,760 Speaker 2: sixty eight percent of businesses claim that they're good at 128 00:08:46,800 --> 00:08:51,000 Speaker 2: protecting their customer's personal information. Now, what I would say 129 00:08:51,040 --> 00:08:55,239 Speaker 2: is the good thing is that nearly all Australian businesses 130 00:08:55,720 --> 00:09:01,560 Speaker 2: have taken a step to strengthen their cybersecurity practices, with 131 00:09:01,720 --> 00:09:05,360 Speaker 2: the top actions, you know, being packing up their data, 132 00:09:06,040 --> 00:09:12,360 Speaker 2: enabling multi factor authentication and obviously encouraging employees to treat 133 00:09:12,480 --> 00:09:15,839 Speaker 2: calls or emails and texts with more suspicion. 134 00:09:17,360 --> 00:09:21,280 Speaker 1: One final question, how do you keep the customer experience 135 00:09:22,200 --> 00:09:28,160 Speaker 1: in security in sync? Because sometimes it's quite jarring that 136 00:09:28,160 --> 00:09:30,960 Speaker 1: you've got to go well, two factor authentication I have 137 00:09:31,040 --> 00:09:32,719 Speaker 1: no problems with. I think that's a really smart thing 138 00:09:32,720 --> 00:09:34,199 Speaker 1: to do, and in fact, it makes me feel good 139 00:09:34,200 --> 00:09:36,000 Speaker 1: about using a platform if I have to do that, 140 00:09:36,240 --> 00:09:38,920 Speaker 1: but at other times it is difficult to have the 141 00:09:38,960 --> 00:09:41,680 Speaker 1: sort of the smooth transition as a consumer working with 142 00:09:41,720 --> 00:09:44,120 Speaker 1: the merchant. How do they manage that. 143 00:09:44,840 --> 00:09:49,359 Speaker 2: Yeah, that's a really good question. And having that balance 144 00:09:49,440 --> 00:09:54,640 Speaker 2: of good security with smooth customer experiences, it's not easy 145 00:09:54,679 --> 00:09:58,880 Speaker 2: to achieve. I think the key is around invisible security. 146 00:09:58,960 --> 00:10:01,920 Speaker 2: You know, security mension is that work well in the 147 00:10:01,920 --> 00:10:05,880 Speaker 2: background so that they can minimize the friction while still 148 00:10:05,960 --> 00:10:10,440 Speaker 2: keeping the data secure. For example, advanced analytics in pro 149 00:10:10,559 --> 00:10:15,080 Speaker 2: detection systems. You know, they quietly monitor in transactions in 150 00:10:15,200 --> 00:10:17,400 Speaker 2: real time and this is one of the benefits we 151 00:10:17,520 --> 00:10:21,000 Speaker 2: have at the PayPal. As I mentioned before, every customer 152 00:10:21,080 --> 00:10:25,760 Speaker 2: transaction is monitoring heavily guarded behind our advanced analytics to 153 00:10:25,880 --> 00:10:31,240 Speaker 2: help prevent fraud. I also very proud that now we 154 00:10:31,360 --> 00:10:35,440 Speaker 2: offer the option to our users to log in using 155 00:10:35,600 --> 00:10:39,720 Speaker 2: past keys, which is a passwordless solution as a more 156 00:10:39,760 --> 00:10:43,880 Speaker 2: secure method of authentication without the hassle of remembering the 157 00:10:43,960 --> 00:10:47,280 Speaker 2: complex passwords, because we know now the passwords one of 158 00:10:47,280 --> 00:10:50,880 Speaker 2: the big issues in terms of security, and this has 159 00:10:50,960 --> 00:10:56,559 Speaker 2: proved to be more secure and offer a better user experience. 160 00:10:57,440 --> 00:10:59,720 Speaker 1: Fantastic Danielle, Thank you very much. For talking to Fear 161 00:10:59,720 --> 00:11:03,280 Speaker 1: and thank you for having me. That was Danielle Fernandez, 162 00:11:03,320 --> 00:11:07,280 Speaker 1: head of information Security at PayPal Australia, a supporter of 163 00:11:07,280 --> 00:11:10,280 Speaker 1: this podcast. This is the Fear and Greed Business Interview. 164 00:11:10,400 --> 00:11:12,640 Speaker 1: Join us every morning for the full episode of Fear 165 00:11:12,640 --> 00:11:15,480 Speaker 1: and Greed Business news for people who make their own decisions. 166 00:11:15,480 --> 00:11:17,320 Speaker 1: I'm Sean aelma Enjoy yourday.