While the financial environment faces a multitude of risks that evolve and change daily, none is more prominent and alarming than the threat of fraud. As criminals continue to become more sophisticated in their strategies and the risk paradigm becomes more complex, banks and credit unions stand to face significant loss if fraud is not controlled.
According to the 2017 American Bankers Association Deposit Account Fraud Survey, fraud against bank deposit accounts cost the industry approximately $2.2 billion in losses in 2016. And the threat landscape only continues to expand, as the rise of the Internet of Things (IoT) and the cloud have propelled an increase in cyber threats and data breaches, with financial organizations becoming top targets.
Now more than ever, banks must become laser-focused on minimizing fraud attempts to protect customers, assets, and the brand. A change must first take place internally, where IT and physical security teams should converge to drive stronger alignment of resources and leadership. This level of collaboration is critical to ensure a comprehensive approach to fraud mitigation.
The next step involves recognizing the value of data and using this valuable tool in a proactive manner. Big data plays a key role in fraud reduction, helping financial organizations identify anomalies and vulnerabilities in real time. Leveraging information from multiple sources, systems, and sensors is critical for intelligence gathering, and can be done using innovative tools and methods that sort through data and determine relevance.
Intelligent technology solutions augment the ability to pinpoint security threats, helping banks alleviate risk and improve fraud investigations. Video surveillance is key to add an extra layer of observation to fraud efforts, and when integrated with analytics, management platforms, and transaction data, financial organizations can achieve enhanced situational awareness and heightened protection.
Banks and credit unions must take advantage of platforms that allow them to simplify, automate, and modernize their processes. Integrated applications, such as facial recognition and advanced identification via deep learning, can automatically pinpoint potential breaches and significant events and alert the appropriate personnel. This approach can be influential in fusing critical information that can be essential to close investigations.
It’s no secret that the threat of fraud will likely always exist for financial institutions. Therefore, banks and credit unions must always stay one step ahead through partnerships, intelligent data collection, and advanced technology solutions.
To learn more, download the new “Looking to the Horizon: The Future of Risk in Banking” eBook.