The threat of fraud is rising. Covid-19 shook the world and accelerated fraudulent criminal activity around the world.
In 2021, the FBI’s Internet Crime Complaint Center received 847,376 complaints from the American public, an increase of 7% on 2020. This amounted to around $7bn in scam losses.
This is a similar picture faced by countries around the world. Scams were up 89% through the first nine months of 2021 in Australia, similarly, scam losses grew by 165% in Singapore during the first half of 2021. While the UK experienced a 71% increase in scams in the first half of 2021.
Quantexa, a data and analytics software company, recently released a blog post that encouraged firms they can fight back against rising scam levels.
It explained that the biggest threats of fraud come by tricking a person or organisation into transferring money to a fraudster who is posing as a genuine business or payee. It said that 70% of scams originate in online platforms and social media sites. The trick to reducing the number of victims is solving issues in these platforms.
The company warned banks should expect more supervisory visitors from regulators to monitor their anti-fraud controls and systems. It also said banks will likely need to rectify issues, highlighting the recent Queen’s speech in the UK which gave the country’s regulator the power to force banks to offer compensation to victims of “push payment” scams.
It added, “Scams may be damaging to the victims, but they are also damaging to the financial institution if they are mandated to reimburse all victims. It is therefore in a bank’s best interest to invest in technology to harden its defences and strike back against scams.”
A way to better safeguard against criminals is to implement a “layered defence”, which is often used to protect against cyber attacks. Quantexa believes this method can also help against fraud, layering additional methods of scam detection and prevention to improve security.
It added, “While this is a powerful method, there is a growing need for financial organizations to harden their defences to stop and prevent these losses, and the best method to accomplish this is by taking a more contextual approach.
“Advanced analytics technology, like Contextual Decision Intelligence, which is underpinned by entity resolution and advanced analytics technology consolidate datapoints around people of interest to generate a single customer view and spot subtle patterns more quickly than a human investigator, therefore creating a fuller picture of risk.”
It continued to state that the most successful scam detection and prevention results come from those using a contextual approach. This boasts faster hidden risk detection rates, increased fraud prevention by uncovering context from data, enhanced customer experience through accurate insights to reduce false positives, and accelerated investigations by boosting team productivity.
Read the full post here.
Copyright © 2022 FinTech Global
Copyright © 2018 RegTech Analyst
