Key Aspects to Consider for Preventing Digital Banking Frauds
In digital banking services and the advent of FinTech and RegTech, banks worldwide focus on modernizing and digitizing their processes to remain competitive and improve the client experience. In addition, with clients adopting a more digital lifestyle and the availability of high-speed internet via mobile service providers and free Wi-Fi, top managed IT service providers in most public areas can help digital banking and online purchases on the have become convenient.
Additionally, the drive toward digitization has accelerated in the aftermath of the COVID-19 outbreak. Innovative solutions offered by top managed IT service providers to the outbreak’s disruptions via digital transactions have now become the financial systems’ saviors. Additionally, digitizing financial designs improves service efficiency in various areas, including client onboarding, fraud protection, regulatory oversight, servicing, and offboarding.
On the other side, financial crime compliance has grown simpler due to the relative ease with which digitally generated transactions can be tracked compared to cash or cash equivalent transactions. As a result, the Financial Crime Compliance (FCC) unit’s reporting to authorities in the event of any transactions above the statutory level has become faster and easier, guaranteeing real-time identification and prevention of fraudulent purchases via internet channels. Additionally, managed services firms can unlock secured digital transactions that have simplified the process of screening the device fingerprint, the device’s geolocation coordinates, browser data, and other behavioral and contextual data about the consumer that may be kept in the bank’s system.
Catching up Vs. Staying Ahead
However, criminals in the BFS sector are catching up with technological advancements, looking for systemic flaws and ways to exploit them. Onboard top managed IT, a service provider to Identity theft and account takeovers as they have become significant worries for financial institutions (FIs). The instances are increasing in today’s non-face-to-face banking environment. When mobile devices are lost or hacked, they may become an independent thinker of financial information. The browser retains personally identifiable information (PII) on portable mobile devices such as the full name and any aliases used, the address, the email address, the passwords, the card numbers, the national identifier such as the SSN, the browser history, cookies, and cache. Additionally, downloaded financial records, contacts, device position history (GPS), SMS, emails, and recently deleted items may be stored on the device.
When scams victimize one, scammers or hackers might swindle the victims’ accounts without their awareness, but before fraud detection parameters are put in place by the financial institution. The scammers use victims’ devices connected to their networks to capture their money from their accounts by obtaining a copy of their device fingerprint and their network IP address.
Managing the Risk
Both clients and financial institutions (FIs) must work cooperatively in the digital banking arena to mitigate these risks.
First, the top managed IT service provider bears the primary responsibility for preventing fraud, which can be accomplished by adopting specific best practices to prevent data leaks and education about avoiding fraud. For example, they should be advised to safeguard the digital banking device against hacking via phishing to verify the authenticity of links received via SMS or email before opening, to avoid using insecure internet access for banking transactions, to use authentication methods for mobile banking apps such as a password, biometric, or PIN, and to access and install only genuine banking apps.
On the other hand, top managed security service providers help financial institutions bolster their digital security and fraud precautions to keep pace with the rapidly growing fraud tendencies in the digital world.
One of the first things the financial institutions should do to combat fraud attempts by the FIs is to keep their clients informed on the typical fraud schemes and market trends frequently. Additionally, financial institutions must employ top managed IT service providers, for machine learning-driven analytical methods to avoid false warnings, resulting in declines in actual transactions and lower customer satisfaction through multiple client connections.
The Road Ahead
In the future, financial institutions can use linkage analysis in conjunction with social media activity analysis to uncover fraud tendencies. This would minimize friction in the user experience indirectly by removing the unnecessary connection for transaction legitimacy. In addition, cognitive solutions like the automatic connection with the consumer by autodialer, push message, or SMS may be an alternate method of connecting with the consumer.
Additionally, periodic internal audits will assist in determining the efficiency of policies implemented to strengthen cybersecurity and safeguard customer data from cybercriminals and data breaches. Real-time monitoring and a faster turnaround time for confirming an anomaly with the client will help reduce the danger of numerous fraud attempts.
While this is not an entire list of anti-fraud measures, this is a growing arena, and financial institutions need to stay on top of new advancements. And this is primarily enabled by top managed IT service providers in the field to ensure that clients are always up to speed on their knowledge, procedures, and controls.