Expert: Fight against fraud in digital payment ecosystem should be strengthened

Creating a risk management framework in the payment market is essential, Tamerlan Rustamov, head of the expert group on payment systems and digital banking under the Azerbaijan Banks Association (ABA), said at the 10th International Finance and Banking Summit in Bakuç Report informs.

According to him, the Bank for International Settlements (BIS) believes that a risk management framework should be established in every country to combat fraudulent transactions in the digital payment ecosystem.

Rustamov noted that there are 22 core principles defined by BIS for financial market participants: "One of those principles is related to operational risks. Fraud risks are also assessed as a component of operational risks. Based on these approaches, as a working group, we had prepared recommendations and a policy document for banks. The goal was to provide certain guidance for payment service providers and to support them in developing their own risk management frameworks based on this document."

Looking from a broader perspective, he stated that such a framework can be implemented at the level of the Central Bank, as well as by banks and fintechs: "This would enable more effective management of fraud risks in the digital payment ecosystem."