enterprisesecuritymag

Leveraging technology and Consumer Education to Reduce Fraud Risk

By Jason Castillo, Head of Enterprise Fraud Management, Citizens Bank

Jason Castillo, Head of Enterprise Fraud Management, Citizens Bank

Fraud is no longer about a single debit or credit card transaction, or a checkbook being stolen. With creativity and technological advancements, fraudsters are accessing data to commit financial crimes virtually anywhere and with any financial product. That being said, technology advancements have also brought us to a point in time when consumer bank accounts are better protected than ever before. With innovations like AI-enabled algorithms for fraud analytics and voice recognition software, financial institutions and the many FinTechs that partner with them have modernized the model for how to manage account security, fraud prevention, detection, and how consumers are kept informed about their accounts.

While this is great news for consumers, it is only part of the story when it comes to keeping money safe. To be truly effective, fraud protection and detection must be a partnership between financial institutions and their customers, with both keeping a close eye out for unauthorized activity. Leverage technology to engage your customer base and ensure they are active in the security of their product because being part of the control to aid in identification of suspicious transactions is becoming more critical to ensure long term success. These engagements don’t have to appear as a fraud or security feature either, as in many cases they can be product enhancements or updates to their activity.

Data shows us that for 10,000 debit card transactions, as many as 15 to 25 can be fraudulent, which is a minimal quotient, thus difficult to identify. Customers are an essential part of the equation in fighting fraud, and it is the responsibility of all financial institution to make sure they arm their customers with the knowledge to help keep their money and the financial system safe.

"As technology evolves, fraud risk will shift with it; nevertheless, it is important to stay mindful of these changes and understand how financial accounts will be impacted"

Educate & Change Behaviors

Many consumers aren’t aware of the simple changes they can make to participate in managing their accounts and protecting against fraud actively. At Citizens Bank, we saw an opportunity to create an awareness campaign with educational videos distributed via media and social media channels, beyond the banks. We designed the initiative to offer simple, but impactful advice for people who want to avoid financial risk. Leveraging mobile app push notifications, new product enhancements, email, and text communications as part of the education push is key for banks as well.

Encouraging customers to adopt new behaviors and actively review their accounts through the ease of mobile and online access is largely successful with Fraud Prevention. It’s also a good financial practice and habit to review transactions on your accounts daily or weekly, especially for debit and credit accounts.

There are many factors outside of the bank’s control that can lead to financial crimes and is extremely difficult to prevent. Personal and financial data security and being vigilant about scams are two other areas where consumers can use additional education to ensure consumers are mindful of the risks when storing or sharing their information with other sources. Banks can use similar communication tools, videos, and messaging to quickly educate and inform the customer base about potential scams and how to protect their account access and data outside the bank. Increased convenience does not mean less risk. Many consumers store their account information digitally, whether on their computer or with a third-party merchant or service, which can increase their exposure to data breaches and unauthorized access to a device through malware or other means.

Technology has made it easier than ever to engage with our customers. Finding creative ways to work with them and engage them as part of the Fraud Prevention program, with minimal to zero intrusion on their daily lives, is key. If done well, it not only increases Fraud Protection. It will increase good financial habits and deepen relationships.

As technology evolves, fraud risk will shift with it; nevertheless, it is essential to stay mindful of these changes and understand how financial accounts will be impacted as well how customer’s habits can expose them and their bank to fraud risk.

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