Home Business Here’s How You Can Have an Enterprise-Wide View of Fraud in Your Organization Today

Here’s How You Can Have an Enterprise-Wide View of Fraud in Your Organization Today

by Olufisayo
Fraud in Organization

There are two very dangerous things that banks need to take note of when it comes to the issue of fraud: first, that fraud can take on many forms, and second, that fraud in the digital era is an increasingly complex problem.

For sure, there are the so-called “traditional” or textbook methods of fraud that banks are already quite familiar with, such as business email compromise of sensitive bank documents, check and deposit fraud, ATM fraud, and phishing for credit card details. But fraudsters have also gotten very clever about methods like transacting through synthetic identities or combining false information with real data pilfered from legitimate customers.

Fraud can also happen across different stages of the customer lifecycle, from onboarding to transactions by registered customers.

That’s why, when banks tackle fraud management, it’s important to understand both the weight and the complexity of the problem. Banks also have to acknowledge who and what are at risk. Aside from their own reputations, banks must protect their customers who are particularly vulnerable to the tactics of fraudsters—those who come from a lower socioeconomic class, heads of small or medium enterprises (SMEs), and older customers who aren’t as tech-savvy as the younger generation.

If you play a key role in your bank’s anti-financial crime program, it’s time to level up your organization’s capabilities and take on a wider perspective in your enterprise fraud management. This is something you can do by rethinking the problem of fraud and revamping your current anti-fraud infrastructure to include a new transaction monitoring AML solution. In addition to this, here are the five steps that your bank can take today.

Aim to Centralize Your View of Your Customer Transactions

The first step is to invest in infrastructure that will allow you a real-time, centralized view of all your customer transactions. This way, you will be able to watch trends evolve in real-time instead of dealing with any potential fraud after the fact.

It will help you and your bank’s transaction monitoring team visualize potential fraud events as they transpire and will also make it easier to determine the finer details about these fraud events, such as how grave the threats actually are and how interconnected they might be.

A centralized solution will also give your staff some added mastery over the day-to-day operations needed for fraud management, such as keeping track of data-heavy transaction monitoring workflows and accounting for losses or settlements made because of fraud cases.

Though the centralized view will not allow your bank to predict the future, it will grant you the power of insight over alarming fraud-related trends. Ultimately, you will be able to identify potential instances of fraud and respond to them before it is too late for your customers.

Think Along the Lines of the Most Common Fraud Scenarios

One very good thing about adopting an enterprise-wide anti-fraud solution is that your fraud detection doesn’t have to start from scratch. The most up-to-the-minute solutions can come with the option to use prebuilt scenarios, plus the detection techniques that are the most applicable to them.

In other words, you can take on a pre-emptive approach for sorting and responding to fraud scenarios that occur at the point of sale, during ATM transactions, during mobile transactions, or during SWIFT transactions. Despite how complex these fraud scenarios already are, you’ll have some measures pre-configured in your system that are tailor-fit to address particular fraud-related threats.

Zero In on the Most Urgent Threats

Fraud thrives most when the people who are supposed to keep watch are easily distracted. Unfortunately, most banks deploy legacy systems that have them unnecessarily preoccupied with the false positives. Your bank must realize that not all potential threats for fraud hold the same weight. The key is to prioritize the cases that are the most urgent and that deserve the most attention.

To properly zero in on the most worrisome cases, you can use your transaction monitoring system to assign different risk scores to various transactions. Train your staff to watch out for cases whose scores only seem to be increasing. This is one of the most straightforward ways to flag fraud events before the situation gets any worse.

Don’t Neglect Your Customer Experience

The three steps discussed above may have you gearing up to concentrate all your efforts on security and screening. But achieving enterprise-wide fraud management won’t be possible if, in the rush to secure your systems, you forget about a vital component in the equation: your legitimate customers.

Though your system should be designed to flag suspicious entities, your legitimate customers shouldn’t feel alienated by it. You can balance out your approach and ease the burden on them by providing targeted alerts. These are a good alternative to mass-disseminated reminders that can seem spammy to customers and, worse yet, have them feeling on edge.

Invest in Scalable Fraud Management Infrastructure for Your Bank’s Future

The best philosophy you can apply to your organization’s fraud management system is to take into consideration the dangers of tomorrow, and not only those of today. As your bank grows, so too should your level of flexibility in dealing with fraud.

Make it your goal to roll out an enterprise fraud management solution that’s adaptable, capable of implementing increasingly advanced statistical techniques, and compatible with evolving third-party solutions. The more “future-proof” your transaction monitoring infrastructure is, the better your chances against the evolving tactics of fraudsters.

Fraud management is an aspect of your banking operations that you shouldn’t neglect, no matter how small your bank is. In fact, given that you may have a lot of vulnerable clients in your customer base, there’s all the more reason to secure your system and advance your current capabilities for detecting fraud.

Photo by RODNAE Productions from Pexels

Related Articles