Fraudsters are getting smarter and have more access to information than ever before. Old methods of authentication —
such as passwords, PINs or even bank account numbers — can easily be obtained by fraudsters on the dark web.
To outsmart bad actors and keep customers’ information safe, financial organizations should consider how tools like AI can minimize opportunities for fraud and add an extra layer of protection into their security systems.
Fighting fraud has always been a key challenge in the finance industry — especially as fraudsters get more advanced in their approaches. A 2019
There are technology solutions out there that specifically target bad actors — both external and internal — to help banks and other financial institutions more effectively prevent fraud. AI in its many forms has proven to be extremely useful when it comes to fraud prevention by using algorithms to determine whether activity should be deemed suspicious. Other forms of AI, such as biometrics, can use voice and behavioral patterns to identify legitimate customers through their individual biological makeup or through information that can be augmented from external factors — such as device fingerprints or location. In many organizations, credibility detection is also gaining traction. These technology-driven safeguards add companies protection customers need —
especially given the current state of the world.
Deploying technology to take on fraud monitoring across customer accounts can help fraud analysts be more efficient and perceptive to fraudulent activity. For example, at the beginning of the pandemic, legitimate customers behaved erratically, triggering fraud detection rules and increasing the false-positive rate of traditional systems. Fraud detection based on biometrics or machine learning mitigates that effect and helps teams stay focused on the fraudsters themselves, reducing the variance in workload and maintaining optimal operations.
In addition to helping fraud analysts, technology can improve the customer experience as well. By turning to digital methods of authentication and identification, financial organizations can eliminate the need for consumers to recall old security questions or PINS, making for quicker, more personalized experiences. Likewise, using voice as an identifier can also make it easy for a customer service agent or bank representative to know who is calling and anticipate their needs ahead of time. Biometrics also provides a level of security that allows financial institutions to open digital channels to more transactions, helping to give more autonomy to customers, and contain them in channels that are less expensive to operate than a call center.
Fraud isn’t going away — in fact, it’s increasing, particularly as the pandemic forces many organizations to continue operating digitally. To safeguard their customers and their businesses — while simultaneously delivering superior digital experiences — banks and financial organizations should turn to AI solutions as they continue to build customer trust and maintain vigilance against bad actors. Tools like biometrics allow organizations to better face social disruption, adapt faster to rapidly shifting fraud trends, and to demonstrate to their customers they take their security seriously.
