Five anti-fraud solutions every financial institution should have in place

The growth of digital banking and e-commerce, spurred by the COVID-19 pandemic, provides fertile ground for fraudsters and money launderers to commit crimes anonymously. Thought leader on fraud and cybercrime, Clive Gungudoo, Director of Financial Crimes and Risk Management at MoDatahighlights five essential controls businesses should put in place to protect their digital customer journey.

For Gungudoo, educating and informing people about financial fraud and the threat it poses to organizations and individuals is more than just a job, it’s his passion. And with over 25 years of experience in the field, Gungudoo is not only familiar with the various sophisticated methods used to commit fraud, he has an in-depth knowledge of the exact solutions that organizations must implement to minimize risk. for customers – and for their customers. own reputation.

“Organizations need a layered approach to fully protect themselves and their customers against fraud and money laundering risks,” says Gungudoo. “This means that a comprehensive set of non-intrusive financial crime risk management controls can and should be integrated throughout the digital customer journey to proactively flag potential fraudulent activity, build customer trust and ensure compliance. regulatory obligations.”

As Gungudoo explains, while many customers were already using online and digital services before the pandemic hit, the global COVID-19 lockdowns have pushed that number up significantly as people have been forced, by necessity, to become digitally active. For many, it was their first time using online banking and shopping. “While this online business presence provides 24/7 customer convenience and opportunities for significant revenue growth, it also provides fertile ground for bad actors – like fraudsters and money launderers. – to commit crimes.”

For organizations to conduct their online business securely and provide their customers with peace of mind, they need to incorporate these five basic controls into their digital customer journey:

1. Dynamic device footprint and risk analysis

Fraudsters typically use stolen devices or manipulate previously used devices to impersonate a known trusted user or as a new user, thereby allowing them to remain anonymous.

“As soon as we introduce a new player, device – a desktop, laptop, mobile or tablet – into the transaction, financial service providers face a trust dilemma – they have to know who is actually hiding behind the device,” says Gungudoo. “Dynamic device fingerprinting enables organizations to accurately detect cyber crimes such as device and location theft, device switching, IP reset, emulators, fake devices, click farms , botnets, home proxies, “man in the middle”, “man in the browser”. and remote access attacks – as well as other advanced methods used by fraudsters. This real-time service provides a fraud score and cyber risk analysis that is transmitted to the company so that it can decide whether to authorize or dispute the new registration, login or payment request”, explains Gungudoo.

2. Behavioral biometrics

While legitimate and private data can be stolen or sold on the dark web and fake or synthetic identities can be fabricated, each user exhibits specific behavioral patterns, which cannot be stolen or duplicated. Behavioral biometrics are needed to detect and prevent account sign-up and takeover fraud by passively and continuously monitoring user behavior from login to logout.

“The behavior is unique to each user – whether you are left-handed or right-handed, the size of your fingerprint, your keystrokes or the time between sessions. Behavioral biometrics analyzes user behavior in real time to detect that your behavior is not in line with how you normally transact on your account. It uses mobile movement patterns and considers criminal patterns to flag fraudulent behavior,” says Gungudoo.

3. Detection of false documents

Often, organizations’ due diligence and credit processes require customers to upload documents digitally. However, skilled fraudsters are able to expertly manipulate documents such as IDs, driver’s licenses, payslips, bank and other FICA statements, proof of income, purchase orders and invoices so that changes cannot be detected with the naked eye.

“There are professional document forgery services. They are executed so expertly that regular checks and manual checks just aren’t enough,” says Gungudoo. “A sophisticated document falsification detection service is essential and can be applied throughout the customer lifecycle – from customer onboarding, to re-applying for credit, to supply chain finance. , insurance underwriting and ongoing due diligence.”

4. Real-time transaction monitoring and strong customer authentication

Fraud and money laundering activities are carefully hidden among vast amounts of legitimate transactions in the financial system, making them difficult to detect. Legacy systems typically use traditional data and supervised rules and patterns that reactively generate alarms – many of which are false. “This forces organizations to employ large teams to manage this unnecessary workload, which ultimately impacts the bottom line,” says Gungudoo.

Real-time transaction monitoring enables organizations to be proactive rather than reactive by applying a combination of artificial intelligence and expert big data rules to detect and prevent new and known fraud and money laundering threats and typologies money in real time. “It greatly reduces false red flags – and is much more accurate when reporting a problem,” Gungudoo says.

5. Advanced Case Management

This service enables organizations’ fraud, cyber intelligence, anti-money laundering, operations and investigations teams to unify and work more effectively in managing, tracking, reporting, l investigation, prosecution and reporting of fraudulent transactions and suspicious activities. “This service connects the proactive and reactive domain of financial crime risk management through a central intelligence and response center – the time and cost savings are significant, even more so in a hybrid working environment,” says Gungudoo.

Clive Gungudoo.

Clive Gungudoo.

At the heart of MoData’s promise to help organizations create an innovative, intelligent, intuitive and safe customer journey is MoData Digital Services (MDS), its software-as-a-service marketplace for all risk management operations. financial crime.

“MDS enables organizations to implement a layered approach and deploy modernized technology that protects their customers and their reputation. Our monthly subscription pricing and pay-as-you-go model means organizations can directly access MDS and our innovative products and services without a massive upfront investment,” says Gungudoo. “As subject matter experts and thought leaders, we continuously scan the market for emerging trends and always ensure that our technology stack is up-to-date and relevant. This means that we are able to give our current and new customers in Africa and the Middle East access to leading global software that matches their market and needs at a competitive price, which includes work, professional services and support.

About Clive Gungudoo

MoData’s Director of Financial Crimes and Risk Management has over 25 years of industry experience, having worked with four major banks, including as Global Head of Fraud Detection and Analytics at Standard Bank Group. As a thought leader, Gungudoo is passionate about digital and anti-financial crime strategies, while innovating alongside its clients to provide the best solutions for their organization. The combination of his experience in IT, risk management and strategy execution allows him to identify opportunities and risks in the market. Gungudoo is able to draw on a range of business experiences to deliver projects that effectively leverage digital technologies.

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