Anti-Fraud Banking Executives in 2014:

I have been interacting with numerous banking executives across the globe this year regarding their anti-fraud initiatives. As we approach the year end, I would like to sum up the key expectations/wish-lists from their anti-fraud programs in 2014. This list is not ordered as per the priority.

  1. The need for a single technology platform for enterprise wide fraud detection: Single platform that can monitor and detect fraud across all the different core systems used by the bank is seen not only a need but as a major challenge by the anti-fraud executives. The platform should monitor transactions and detect fraud in core banking, online banking, mobile banking, debit cards, loans, and credit cards.
  2. Cross-Channel Intelligence: Ability to correlate the intelligence gathered from on source system with the events happening on other channel system (cross channel fraud detection) is a key consideration – Traditionally some of the banks have adopted silo based systems that have the ability to monitor and detect fraud a single channel/product e.g. credit card fraud detection, internet banking fraud detection etc.
  3. Non-financial transaction patterns: Ability to correlate at non-financial transaction patterns with financial transaction patterns in fraud detection is one of the key aspects. Some of the modern core banking systems do not even log/audit the non-financial transactions like balance enquiries and signature views in the core banking database. These are vital early warning signals for early detection of fraud attempts. It’s important that the fraud detection system is capable of handling non-financial transactions in addition to financial transactions
  4. Really Real-time with minimal impact on the core processing systems performance. Though most of the current generation fraud detection systems work in near real-time for processing transactions, banks are looking for real-time fraud detection systems which can process banking events from core banking systems within seconds even milliseconds.
  5. Insider Fraud – Banks are bleeding through the sheer number of insider frauds encountered though the size of each fraud is small. Insiders are also usually involved in larger fraud attempts by collusion with outsiders. Effective fraud detection should be able to monitor employee activities across multiple systems (core banking, CRM, HRMS etc.)  they access and derive patterns of suspicious activities.
  6. Fraud in direct channel banking transactions ( online, mobile, ATM, POS, internet payments) – With the increasing sophistication of fraudsters banks are playing a catch up game to secure the direct channel banking transactions with better fraud prevention capabilities. This includes efforts to prevent account take over, man-in-the middle attacks, CNP fraud, data breaches, skimming etc.
  7. Intuitive Investigation workbench: Agility of the case management to suit specific workflows between business, compliance and fraud investigation is seen as a consideration. Wide array of investigation tools like account/alert profiles, visual link analysis and reports is also vital for improvements in investigator productivity.
  8.  Strength of the Scenario Library/ fraud detection models: Many banks do not have the in house availability of expertise in defining fraud patterns and they expect solutions to come with out of the box patterns and models for fraud patterns. Another key consideration is the ability to add and publish new fraud patterns in fraud detection engine without any code changes.
  9. Time to market (Ease of deployment, integration, flexibility of changes, modern architecture) – Few banks have burnt their fingers with long drawn out project for enterprise wide fraud management implementation with established vendor solutions. Banks are looking for solutions which are easy to deploy and integrate with the existing systems albeit in shorter implementation cycles.
  10. Alignment of Anti-fraud initiatives with anti-money laundering efforts – As both anti-fraud and anti-money laundering units ultimately roll up to operational risk management, banks are looking for synergies and cost optimization by having unified solution/platform which can deliver both fraud detection and anti-money laundering solutions.

How do you envision your anti-fraud measures to combat enterprise fraud at your bank? Do let us know your views-we’d love to know.

About the Author:

Jayaprakash (JP) Kavala

Director – Product Management

Jayaprakash (JP) heads Product Management and global Pre-Sales, Alliances and Business Development for CustomerXPs’ Clari5 product suite. With over 13 years of rich and extensive Fintech experience and deep understanding of business, domain & technologies across products & services, JP is an accomplished banking technology professional with experiential acumen in taking high-tech enterprise products to market. With 360 degree experience in steering products from conceptual stage to category leadership, he has a commendable track record in building, positioning & selling Enterprise Fraud Management and AML solutions. JP has had several C-level conversations, has conducted consulting assignments at prominent global financial institutions and brings deep knowledge of market trends & requirements in the enterprise financial crime management domain. In his previous role at Wipro Technologies, JP led domain-specific consulting assignments for large banks across US, UK and India spanning across Core Banking, Internet Banking, Mobile Banking, Credit Cards, Lending, Payments and Cash Management. At Wipro, he also led business analysis for their Banking Business Solutions CoE. JP holds an MBA from IIT-Delhi and is a B.Tech in Computer Science from Osmania University.

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