How should banks comply with the new requirements of NBU Resolution No. 58?
In May 2023, the Board of the National Bank of Ukraine adopted Resolution No. 58. According to it, each bank that provides payment services must ensure authentication and enhanced authentication, confidentiality and integrity protection. In accordance with the resolution, a payment service provider must use mechanisms and procedures for monitoring transactions to detect unauthorized or fraudulent activities. They are based on the analysis of operations considering the components that are typical for a payment service user, provided that sensitive payment data is properly used.
Challenges faced by the banks in Ukraine:
— The Resolution does not provide specific rules, as there are no clear requirements for the control system
— Transaction verification mechanisms need to be implemented for different systems, and legacy systems do not have verification mechanisms or the ability to transfer a transaction for verification to third-party systems
— Limited time to develop and implement a control system (anti-fraud system)
— Lack of qualified personnel for the implementation of the system and its up-to-date maintenance.
Solidity has created a solution based on IBM Safer Payments that will help banks comply with the requirements of Resolution 58. It allows banks to implement an anti-fraud system in a few months and mostly without interrupting payment services.
IBM Safer Payments is one of the best solutions on the global anti-fraud market. The system is PCI-DSS and PSD2 certified, which greatly simplifies certification. There are also implemented projects in Ukraine. The anti-fraud system provides the ability to maintain it independently, without the intervention of a manufacturer or contractor, and to create new rules and checks in a graphical interface.
As a result, the bank will receive a fully working solution in production in two months and will be compliant with NBU regulations on Resolution No. 58. The customer will have its own trained team to maintain the system and analyze incidents.
Thanks to the anti-fraud system, fraud rates and reputational risks associated with fraudulent activities will be reduced by 20 times. Most importantly, the speed of applying countermeasures to new fraud or regulatory requirements will decrease from days/weeks to minutes.
In general, Resolution No. 58 of the National Bank of Ukraine has a major impact on the banking system's functioning. Banks should be aware of the need to make changes to their operations to meet the new requirements. This is a necessary step towards improving financial stability, ensuring security, and protecting the interests of customers. Banks that quickly and effectively adapt to the new requirements will have a market advantage and will be able to strengthen their position in the modern banking sector.