Attending the recent Transform Finance ‘Virtual Fraud in Financial Services’ online event was a great opportunity to share experiences and knowledge with experts from across a highly innovative industry.
The event took in a range of critical themes, including our session with Cifas focusing on ‘Using Advanced Analytics To Detect, Prevent And Tackle Fraud’. Reflecting on the experience overall, there were a number of key takeaways that illustrate both the challenges and opportunities facing an industry increasingly reliant on technology to deliver effective services while tackling some major obstacles to success:
- The Changing Fraud Landscape
Many organisations are investing heavily in their use of data and technology to positively prevent and detect crime and fraud. This is essential as the emerging trends are worrying – The 2021 Identity Fraud Study revealed the true scale of identity fraud scams to consumers and businesses alike. While total combined fraud losses climbed to $56 billion in 2020, identity fraud scams accounted for $43 billion of that cost with ‘traditional’ identity fraud losses totalling $13 billion.
With fraudsters becoming more sophisticated, it is essential that organisations across the diverse finance industry constantly adapt to change with technology and application of data.
- Innovation And Cooperation
In a changing world, it’s clear that financial institutions understand the need for greater collaboration and data sharing across the industry. There is growing recognition that a more joined up approach to issues such as fraud detection and prevention is key to delivering effective outcomes. As an example, cooperation between ‘core’ public and private finance organisations with third party organisations, including regulators, mobile providers and social media companies is essential best practice when it comes to reducing the incidences and impact of fraud.
This extends to the wider implementation of technologies such as digital signatures and document sharing through digital channels and the development of digital currency for financial inclusion. In all these emerging areas, working together is key, while the application and proactive use of data, good management, metrics and governance can help ensure success and make sure that industry-wide goals in relation to fraud are clear.
- Tackling Major Fraud Trends
As part of our contribution towards the Transform Finance event, our Chief Data Scientist, Rich Pugh and Sandra Peaston, Director of Research & Development at Mango customer, Cifas, joined a panel session to discuss the use of data and intelligence to support fraud prevention.
Among the areas discussed, the panel agreed that it is essential that the industry operates from a level playing field and by sharing intelligence via organisations such as Cifas. In doing so, finance businesses across the sector are much better placed to adapt to new trends. For instance, an approach called ‘transfer learning’ can enable small organisations to benefit from the insight and data generated by larger businesses to react more quickly and effectively. There should also be ongoing efforts to improve customer education and awareness, reinforcing the idea that individuals always need to remain vigilant.
Looking to the future, data and technology will play an increasing role in combating and detecting crime. By maximising collaboration between corporates, banks, regulators and other key stakeholders, the industry will move towards a scenario where fraud detection happens in real time to minimise risk and loss.
To achieve these goals, organisations must focus on improving their capabilities, modernising fraud operations and maximising the technical competency of their teams. Those that do will be ideally placed to play a full and effective role in tackling fraud while gearing for growth.
For more information on how Mango is supporting working and detecting financial crime, read our Cifas case study.