There’s no shortage of damage payments and social engineering fraud can do to a company as well as its member relationships.
Creating silos within an organization usually isn’t one of them, but it’s exactly the aim of an upgraded fraud prevention effort from PSCU/Co-op Solutions. The fraudsters are getting more sophisticated, and social engineering and artificial intelligence (AI)-enabled scams are gaining ground and forcing financial institutions (FIs) to reconsider how they’re bolstering their defenses.
Karen Postma, senior vice president of risk solutions at PSCU/Co-op Solutions, told PYMNTS that linking previously siloed banking channels — and sharing data in real time — is a critical line of defense against fraud.
“Over the past several years, as an industry, we’ve talked about a layered approach to fraud,” she said.
That approach typically has set up separate layers of protection across an online banking channel, a mobile channel and the authorization channel, she explained.
“But that approach does not necessarily account for the silos that are then created” in the sharing of fraud-related information and experiences, she added.
The conversation came against a backdrop in which PSCU/Co-op Solutions said it has begun a multi-year initiative to “evolve” its Linked Analysis platform. The new initiative will add cloud migration and enhanced AI capabilities for data integration and collaboration that Postma said will cement a holistic view of members while battling fraud across channels.
Linked Analysis solves for the siloed environments and pain points of data sharing by cross-pollinating information across various channels, she said.
“You don’t have to ‘learn’ about a certain broad trend in, say, 3DS and in authorization and online banking — the information is used across the spectrum,” said Postma.
Data is offered up via thousands of financial institutions. Along the way, stakeholders gain insight into fraud trends that might start “small” but would otherwise evolve from the call center into mobile channels, for example, and shut down the fraudulent transactions before they get to the authorization stage, she said. Understanding where consumers are using apps or transacting in 3DS environments, and even where the IP address is coming from can help inform cross-channel defenses.
Thus far, Linked Analysis has helped credit unions mitigate tens of millions of dollars in what would otherwise have been losses to fraudsters, she said.
The newest and upcoming iterations of Linked Analysis also will offer up a holistic experience on the member-facing side of the interactions, breaking down silos there as well. Alerts will be uniform across channels — into what Postma said would be “the same short code, the same verbiage, the same messaging,” throughout cross-channel engagements.
The data sharing — done in real time — is streamlined using cloud-based technologies and APIs, she said. The platform approach also keeps credit unions from having to do the technical heavy lifting of integrating various forms of AI on their own to build new fraud-fighting defenses.
“There’s a lot of movement toward the cloud, and that’s where a lot of the new technology is landing for interoperability” between FIs and between their own internal departments, she said.
Looking ahead, the new Linked Analysis iterations will give rise to a “single case management system” that funnels data and data sharing through a standardized lens of communications, she said. The roadmap also will be one where members can convey their preferences about how they want to communicate with their credit union — and how they want to receive those communications (via text or email, for example, or push notifications).
“We’re not only detecting and preventing fraud,” she said, “we’re forging a consistent experience for the member — with less interruption to their normal, everyday transactions.”