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Making life difficult for fraudsters: what measures are the government and the Central Bank proposing to protect biometric data
"We are currently working with the Central Bank to develop a law that will prescribe a set of specific measures that will complicate operations for fraudsters," said the Deputy Prime Minister of the Russian Federation, the head of the government apparatus. Dmitry Grigorenko said this at the Finopolis 2024 forum. According to him, the document will primarily talk about establishing barriers. "We start with client identification, including biometric, and then take a number of additional steps to make sure that the client is a client of the bank," Grigorenko said.
Therefore, when using biometric information, it seems that we will be talking about a type of two-factor authentication method, i.e. two-step verification of identity. It is now used when making payments online or logging into government service portals. This security system is familiar to almost everyone. In addition to a password, you also need to enter a code from an SMS message to protect your account. In the case of biometrics, the second verification step (depending on the content) can slow down payments by face or fingerprint, but increases reliability. What prevents many people from providing and using their biometric information is the fear that such data will be hacked and stolen (the feeling that compromising your biometric information is much worse than losing your passport or bank card is also excluded. It is purely psychologically difficult).
Fearing hacking or theft of biometric information, many people are reluctant to provide fingerprints or facial photos to facilitate payments.
According to Grigorenko, the bill also plans to provide for the possibility of refusing to take out online loans in advance. Among the planned measures, Grigorenko also mentioned the difficulty of identifying customer accounts and the possibility of issuing online loans to third-party accounts.
"That is, this is a set of measures that will complicate fraudulent transactions, and in some cases, prevent them. This is due to the fact that fraudulent transactions are often carried out because citizens do not fully understand some digital methods. Services and fraudsters can gain access to personal accounts in one way or another," the Deputy Prime Minister said.
By introducing universal payment QR codes, the central bank will create infrastructure standards without competing with commercial bank products. This was stated by Elvira Nabiullina, Chairman of the Bank of Russia, at the Finopolis 2024 exhibition.
Currently, universal QR codes allow customers to make purchases simply by scanning them in a payment app, for example, using a phone camera. Therefore, one QR code is suitable for many payment methods: using paid services, installment services through the Fast Payment System (FPS) and, in the future, using digital rubles (Russian banks plan to launch them on a large scale in mid-2025). At the same time, buyers will have the opportunity to choose loyalty programs and receive cashback from banks or the FPS.
A week ago, the National Payment Card System (NSCP) announced the early implementation of universal QR codes in the SBP acceptance network. "All banks can connect to the universal QR code and gain access to the technology on equal terms. This makes it possible to create equal conditions," said Dmitry Dubynin, CEO and Chairman of the Board of Directors of NSCP.
But what is interesting is that in the summer, when NSPK announced the launch of a pilot program for the introduction of universal QR codes, almost simultaneously Sberbank, Alfa-Bank and T-Bank announced their joint work on another single payment QR. The code operates on the basis of Sberbank's multi-QR technology. This is what was discussed at the Financial Technologies Forum.
"Universal QR cannot be presented as a fight between regulators and banking consortiums for control over the market. We believe that Universal QR is not a product, but an infrastructure standard that does not compete with market products," Nabiullina emphasized. In response, Sberbank representative German Gref said that he is in favor of a universal code and is "against proprietary codes."
The coefficient of non-cash payments in Russia will soon exceed 90%. This is the level of world leaders.
According to Nabiullina, infrastructure standards can be compared to electrical outlets. "We can create different standards. Then we will have one national standard and a second standard from several banks. But this is probably not the norm. But we hope that the right decision will be made. It will be created," the head of the Central Bank said.
According to VTB Bank President Andrey Kostin, the model with uniform standards for Russian banks can be considered optimal, and this is what the bank supports. "If any bank, no matter how big it is, by its standards tries to drive us under the roof, we, of course, will not agree, we, small banks, will resist as much as possible," Kostin said sarcastically.
Olga Skorobogatova, First Vice President of the Bank of Russia, told Finopolis 2024 that by the end of 2024 the share of non-cash payments in Russia will reach 86-87%. At the same time, according to her, this figure has already reached 85%.
"This means that we will confidently reach this figure of 90%, perhaps 92%, within the next two years. That is, in principle, at the level of world leaders in the development of non-cash payments in the country," Skorobogatova emphasized.
This trend does not mean the abolition of cash. Recent statements about such prospects have excited many. As Georgy Kornilov, Deputy Director of Goznak for Marketing and Strategy, stated at the forum, money will not disappear in the near future, and there are neither the appropriate abilities nor skills for this. According to Kornilov, currently, Russian residents have about 17 trillion rubles in their hands. The volume of cash has stabilized and is not expected to decrease significantly.
17 trillion rubles in cash are in the hands of Russian residents. These figures are unlikely to decrease significantly.
In September, Kornilov said that discussions on the fundamental need for cash circulation could begin in 2030. However, he stressed that this does not mean that Russia will be left without cash in six years.