Fraud is omnipresent & as the technology is rising the fraudsters turn to new ways and newer channels to target banks and customers. Most common type of banking fraud across the globe are:- Skimming : Card fraud is one of the most fascinating aspects of the payment industry, not least because it is relentless and mutating.It means that attaching a device to the mouth of the ATM that in.......

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Combatting Cross Channel
Fraud in 2015

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Pervasiveness of Banking Fraud
Fraud is omnipresent & as the technology is rising the fraudsters turn to new
ways and newer channels to target banks and customers.
Most common type of banking fraud across the globe are:-
 Skimming : Card fraud is one of the most fascinating aspects of the
payment industry, not least because it is relentless and mutating.It means
that attaching a device to the mouth of the ATM that in secret swipes of
debit and credit card detail when their card slides to the machine. And by
using these information fraudster successfully create the counterfeit card.
In simple word “ Theft of payment card information”.

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Pervasiveness of Banking Fraud
 CNP (Card Not Present): Because of the accelerated proliferation of online and
mobile-commerce, card-not-present (CNP) fraud is an increasing concern to
banking. It is a fraud in which customer does not physically present the card to
the merchant during fraudulent transaction.According to report of Payments
technology company , the CNP has topped the list amongs all the fraud.
 Online: Online fraud cost companies billions of dollars each year, cutting
dramatically into earnings. This emphasis on mobile and online fraud is even
more disturbing as merchants rely on the upcoming switch to EMV to reduce
card fraud. Fraudester take over victim's online banking account through some
course of action like man-in-the middle attack, phishing & money mules. Online
fraud alone has cost the global economy more than 400 billion USD.

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Problems with current fraud management
 As banking institutions have grown bigger, managing multiple portfolios and
business lines across numerous channels has made fraud detection harder.
 Another major challenge that banks face is the quantity as well as the
variety of information that needs organized and to be mined to be able to
find fraud.
 Quantity & Variety of information in bank are not organised due to which
the level of fraud is increased & its hard to detect the fraud.

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Problems with current fraud management solution
 Most of the solutions available today are focused on only one
channel or type of crime. Silo based transaction systems and
multiple systems of record make measuring the success or failure of
existing fraud defenses a challenge.
 While rule-based systems are proficient to spotting the fraud
patterns but the fraudster has discover the new ways to circumvent
the system.
 In addition, too many false positives, lack of speed in transaction
authentication and inefficient investigative processes drive up
operational costs, as banks are forced to increase spending on
enterprise financial crime management against sophisticated attacks.

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Fighting Fraud
 The challenges discussed above have led to the extreme need of discarding age
old fraud management systems that follow the starfish approach of working in
silos, without any sharing of real-time information across different channels.
 As banks are behaving like proactively because the detection of fraud at given
channel happen post facto,without taking any consideration update from other
channel,which in turn diminishes the chance of predicting future cross channel
attack.
 Therefore, to counter frauds, a holistic view of the entire ecosystem is required
that takes into consideration different entities and cross pollinates useful
information in real-time across multiple products and channels. To overcome all
these drawback the cross channel EFM solution is best .

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Benefits of Cross channel fraud management solution
 Enhanced fraud management capabilities with a holistic view : A centralized
software platform that performs cross-channel fraud analysis not only
prevents suspicious activity from getting through to the system but also
creates fraud and AML alerts which give financial crime investigators a full
view of particular customers and the range of activity they are performing.
This results in growth of its knowledge of risky customers and their range of
activity.
 Increased Efficiency: The combination of cross-channel fraud and a lack of
communication mean an inevitable overlap in investigative effort.
 Immensely reduce occurrence of "False Positives": Due to the cross pollinated
intelligence acquired from different channels and identification of suspicious
patterns before the transactions go through ,the “False Positives” reduce
immensely.

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Benefits of Cross channel fraud management solution
 Reduced Reputational loss due to fraud: Banks lose money as well as
reputation due to fraud. This loss of reputation results in loss of potential
business. A crosschannel solution helps mitigating this loss by proactively
detecting and preventing banks fraud .
 Enhanced customer advocacy & loyalty: Reduced frauds across channels
ensure winning back trust of customers.

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