In recent years, the banking industry has undergone rapid digitalization, particularly in the use of digital and mobile devices for accessing bank services and making payments. While these services have heightened convenience for customers, they have created substantial opportunities for fraud and financial crime.
Banks can lose anywhere from a hundred million to several trillion dollars annually due to cyber crimes. Additionally, cyber criminals continue to develop more sophisticated technology, including unauthorized access to confidential information and mobile devices and undetected malware. Each time a bank unrolls a new product with a new distribution channel, there are new potential risks. These issues have led to banks managing data for improved fraud and crime prevention so that they can address security problems on a continual basis.
Banks and other financial service organizations must strike a balance between meeting customer demands and staying ahead of their competition. Customers have to know that there are appropriate safeguards in place to protect their sensitive information and ultimately, their assets, before they will use new digital services. Banks must also prove to regulators that they are taking an active role in crime prevention with standardized, enforced controls across business units and locations. Finally, banks must show their shareholders that they are managing the financial and monetary risks that are associated with financial crime.
There are three primary means for banks managing data for improved fraud and crime prevention to develop an integrated, timely data set and to use sophisticated analytics to generate meaningful insight about the data.
Three Means To Prevent Digital Fraud And Financial Crimes
Improved Data Quality
Financial service firms fight crime with varied internal and external data sources. However, many firms, especially national banks with operations in multiple regions across different lines of business with multiple data sources and systems, face problems with data quality. Banks must implement centralized data screening and reconciliation processes to address this issue. Varying fraud management systems use customer account and transactional data that they collect from multiple sources. Screening and cleaning the data improves analysis quality and helps decrease the quantity of false positives, which are time consuming and tedious to address. Banks must also improve their data administration, setting clear responsibility distinctions among business process owners as well as IT departments and fraud and financial crime data management teams.
Data, Information And Insight Via Analytics
Most banks and financial organizations have plenty of data. However, they may not necessarily have the right data. Using Big Data to drive decision-making gives banks insight into the varying physical, financial, commercial, and societal components of their operating environments. This insight improves the quality of the decision-making, helping banks reduce their crime rates, uphold their reputations, and assist their employees in a better understanding of their customers.
With centralized Big Data, banks can apply analytics to gain valuable insights and make smart decisions quickly and flexibly. In an age with ever-increasing regulatory requirement stringency and rapidly evolving financial crimes, this adaptability and agility is more important than ever.
Data Visualization Techniques Application
As data volume and complexity increases, prominent software providers, such as SAS, are implementing data visualization techniques that allow business experts to view complex data with a visual interface. This layout makes it easier to identify visual patterns and inconsistencies. For example, software monitors customer accounts continuously so that suspicious transactions and activities can be flagged immediately.
When fraud investigators can view transactional flow across multiple accounts visually, they can pick out new patterns. In the event that there is a complex case that requires a more detailed investigation, visual clusters of interrelated accounts are helpful for identifying and analyzing risks.
Veriti Consulting LLC provides professional fraud and financial crime investigation services across the U.S. Learn more about our services by calling 855.232.4410 or contact us via email
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