Technologies to Thwart Banking Fraud

Puneet Taneja - 06.04.2019

Today’s banking environment is plagued by sophisticated cyber attackers costing billion dollar payment frauds. Technology driven fraud detection and prevention solutions can help financial institutes thwart banking fraud, unlock revenue growth and ensure customer loyalty.

The risk of fraud in the banking and financial sector has heightened drastically, with fraudsters constantly evolving their game through new means and technologies to hoodwink the system. The financial industry is grappling with a billion dollar fraud – as the fraud multiplies, spending on its prevention increases with it and this catch-22 situation become a never-ending cycle.  In 2018, banks lost an estimated $31 billion globally and this number seems to be on a rise. The threats posed by cyber attackers have never been higher and is expected to cost banks $6 trillion per year by 2021. But financial institutions are fighting back by developing talent and technology needed to tackle the fraudulent activities.

As per FIS’ recent Payments and Connectivity Market report, 59% of respondents stressed that decreasing fraud risk is their primary objective. Overcoming losses generated from bank fraud also positively affects customer satisfaction and build trust between the consumers and their banks. This relies on banks investing in up-to-date technologies and counter fraudulent transactions in a proactive manner in real time basis. While selecting and implementing the right technology plays an important role, organizational and human elements are just as critical.

A mindset shift is required to effectively combat fraud through technology. Banks should appreciate that the technological advancements not only make fraud more pervasive but also diminishes the chances of future risk. With this shift to digital banking, financial institutes have provided lower-friction digital experience to high-risk customers – and higher satisfaction levels to low-risk customers.  This disruption of cyber & data analytics and fraud detection have also created a ready supply of talented, cross-disciplinary resources unencumbered by legacy organizational structures.  The challenge today is to harness these elements to scale down current losses, detect and tackle emerging fraud and to enhance customer experience.

We at Teleperformance India have identified three concrete steps to effectively solve cybercrimes: 

1.    Reengineering fraud operating models by adopting state of the art technology

2.    Redesigning customer journeys by investing in in-house resources

3.    Redefining the merge between technology and human touch

To address the challenges and stop billions of dollars of fraud each year, Teleperformance India have crafted a profoundly innovative approach that enables the extraction of vast cross-channel data and detects fraud in real-time. By adopting AI, Machine Learning, Biometric, risk and behavioral analytics, we have witnessed a 50% reduction in anti-money laundering alerts and a 98% increase in fraud detection.

Using advanced data analytics Teleperformance India have prevented proactive fraud worth $2million annually and serviced 2.53 million fraud transactions. By harnessing the power of technology, organizations can be secured from payment fraud, but that’s just half battle won. Combining technology with human touch is the key to combating banking frauds. Most AIs excel in single tasks but are unable to deviate or expand from their scope. Technology is not foolproof yet and still requires human intervention at multiple stages. The trick is to employ customer engagement agents who can aid in the risk management process, solve fraud cases, pre-empt cybercrimes and treat its causes rather than symptoms.

By adopting technological advancements and resources with fraud detection and prevention expertise, banks can solve this multi-billion dollar fraud, anticipate forth-coming cybercrimes, enhance customer experience and create greater customer value through continuous service innovation.

By Puneet Taneja, EVP at Teleperformance in India

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