Security & Fraud

Financial Crimes Management Solutions Join The Fraud Battle

Financial Crimes Solutions Join Fraud Battle

Who doesn’t love a good mystery crime drama? Fraud victims, for a start. And for corporations in the financial sector, fraud scales. That’s millions of records hacked, accounts taken over and lives disrupted. Right now, the situation is worse than ever, as COVID-19 chaos gives crooks the greatest opportunity they will likely ever see – and they know it.

Bright spots are appearing, however, as financial institutions (FIs) and merchants deploy new technologies that prevent financial crime while ensuring compliance with a tangle of new privacy regulations. As noted in PYMNTS’ May 2020 Preventing Financial Crimes Playbook done in collaboration with crime management software provider NICE Actimize, “it can seem like an impossible task for FIs to make a dent in financial crime rates, but new technologies have shown promise.”

“Artificial intelligence (AI) and machine learning (ML) can analyze the thousands of transactions banks process each day in real time … far surpassing human analysts’ abilities to screen them by hand. Human intuition will likely play a prominent role in financial crime prevention for the foreseeable future, however, as educating bank employees and customers will be crucial to ensuring they are not deceived by phishing emails or other social engineering techniques.”

Partnering and Platforming Against Fraud

Reminding us that “…more than half of all banks recover less than 25 percent of fraud-related losses, and FIs have reported a 59 percent growth in fraud value and a 61 percent increase in fraud volume since 2015,” the new Preventing Financial Crimes Playbook details how organizations are partnering and platforming to ensure that fraudsters have no hiding places.

“FIs need to examine their fraud controls to ensure their institutions can support the ongoing shift to digital. Whether they be operational- or analytics-focused, FIs must stay agile to quickly adapt to evolving threat landscapes faster than ever before,” NICE Actimize General Manager of Fraud and Authentication Yuval Marco told PYMNTS.

“They must be sure to take advantage of tools such as consortiums to benefit from the findings of industry peers. [And] FIs need to ensure their customers will continue to have a secure and frictionless banking experience,” Marco said. “Consumers have had to quickly adapt to a fully digital banking environment, which can cause confusion and leave many vulnerable to fraud. Meanwhile, fraud analysts are under pressure to manage increasing alert volumes. Identifying the balance of just enough friction can help FIs offer the level of customer experience their clients expect.”

Finding that ideal friction balance is increasingly the domain of multifactor authentication, backed by the analytics muscle of AI and ML. “There are three primary factors of good authentication: something you know, like a password; something you have, like a [code sent to your] phone; and something you are, like a biometric,” Debbie Guild, chief security officer at PNC Financial Services, recently told PYMNTS. “Requiring at least two of these gives you something that’s secure, but not hugely inconvenient to our customers.”

Fraud Fighters Unite

People, banks, credit unions (CUs), merchants and platforms have all been targeted by cyberthieves since the pandemic descended just a few months ago.

“The FTC recently stated that Americans had lost $13.4 million since the beginning of the year across 18,235 separate scams related to the outbreak,” the new Playbook states. “These efforts took many forms, including websites claiming to sell personal protective equipment, fake travel plans and attempts to steal the economic impact payments issued by the Internal Revenue Service (IRS).”

Solution providers are stepping into the breach, and promising new partnerships are showing what good actors can accomplish when they combine forces to combat theft.

The May 2020 Preventing Financial Crimes Playbook cites the example of NICE Actimize and IT firm Infosys partnering to provide Infosys customers with a newly configured suite of fraud prevention tools served in a cloud environment.

“The partnership will help organizations deal with emergent fraud threats and improve their back-end efficiencies … with the NICE software to be deployed across a range of industries,” the Playbook states, noting that “these solutions focus on three key areas: speed, cost savings and future-proofing,” according to Ajay Vij, senior vice president and head of financial services business, EMEA for Infosys.



New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.