The Conceptual Approaches to Improving the Security of the Banking Payment Environment of Ukraine

Abstract

The article is aimed at studying the impact of digital transformation processes on changing the financial security system of the banking payment environment. Scientific approaches to understanding the essence of the category of «financial security of bank» are analyzed, allowing to identify the main signs of the bank’s payment environment in the current conditions of establishing the digital economy. It is defined that this type of security depends on the economic and political stability of the country, as well as on the level of the users’ access to the Internet and related electronic devices. It is determined that the largest number of cases of loss of money accounted for payment card fraud, so the main types of fraud are described: online payments on unprotected sites (fishing sites); phone fitting; re-issue of SIM cards; unprotected Wi-Fi hotspots; fraud with lost and stolen cards; ATM fraud (skimming). The nature of these types of scams and ways to protect against them are described. The banking payment environment in Ukraine in the conditions of digitization is analyzed in detail, which has allowed to identify a number of new directions of innovative banking activity (FinTech, InsurTech, WealthTech, etc.). Also presented is an analysis of the tendencies of losses from card fraud on the example of leading European countries. The main instruments to improve the proper level of security of the banking payment environment (open banking based on the API protocol, Third Party Provider (TPP), Strong Customer Authentication (SCA), 3D Secure, etc.) are considered and ways to protect confidential information for banking institutions and their customers are presented. Much attention is been paid to describing the benefits of Open Banking, which is gradually changing the authentication of customers based on modern digital capabilities and enabling rapid innovation; personalizing banking products for the customer; customer and bank security; simplifying the licensing procedure; transition from competition between banks and FinTech to a cooperation; cheaper banking products for the customer availability of banking products.

Keywords

• financial security
• payment instrument
• banking system
• digitalization
• financial technology