How Banks Can Fight Back Against COVID-19 Emboldened Criminals
Written by Araliya Sammé, Head of Financial Crime at Featurespace (first published by SC Magazine)
Banks are already taking steps to ensure Covid-19 related threats are mitigated successfully. Now financial services could make some truly positive changes from the situation we find ourselves in.
One of the effects of dramatically changing work patterns and daily routine is that the behaviour of individuals from all walks of life is changing dramatically. This means that financial institutions relying on static rules-based risk management systems are likely to see huge numbers of false positives. This can cause AML investigators an unnecessarily large workload, or cause genuine transactions to be declined for Fraud teams, as thresholds are hit by unprecedented numbers of people with changed behaviours, for example:
- Unusual cross border transactions could increase as family members send financial aid to relatives in other countries or buy essential goods from abroad
- Consumers may open new insurance policies, close policies before they normally would and generally act in ways that compliance professionals would deem suspicious
- We even expect to see more buying and selling of gold and withdrawing of investment funds
This increase in false positives, combined with a dispersed risk management workforce, creates an ideal environment for criminals to hide among the unusual transaction behaviour. They can work safer in the knowledge that the rest of the population is behaving as the criminals are, albeit with more honest intentions.
Criminals moving fast
We have already seen an uptick in fraudulent behaviours like scams taking advantage of the fear that many are feeling about the pandemic. We know that where there is fraud, money laundering is likely to follow. There are already predictions of money muling rings gaining many new potential mules, with job losses creating a populace driven to make money in unconventional ways. We have seen reports of Coronavirus 'donations' being used as the premise to get unsuspecting employees to move Bitcoin currency around, adding new mule threats to warn consumers about.
This leaves financial institutions under increasing pressure as they deal with rising alert levels and existing backlogs, while also managing unusual remote working environments.
Meeting the challenge
Financial institutions can meet this challenge by moving quickly to ensure that staff can work effectively from home by prioritising providing the right data to their investigators. There should be a renewed focus on banks keeping up a high standard of transaction monitoring even if working conditions might be difficult. Ensuring investigators have access to necessary customer records is a simple way of making their work easier during this time.
With the potential increase in false positives, prioritisation is more important than ever. Machine learning-based adaptive behavioural analytics can do the heavy lifting here, enabling investigators to focus on the highest priority alerts by eliminating a high percentage of false positives.
It is more important than ever to create good quality Suspicious Activity Reports (SARs). Financial institutions would benefit hugely from understanding individual behaviours to reduce false positives and prioritise alerts effectively without relying on manpower, using adaptive rules and advanced machine learning for more effective transaction monitoring.
To read the full story for free, click here.
Aite Fraud and AML Machine Learning Platform Evaluation
Aite Group, a global research and advisory firm, has recognized Featurespace™ as Best-in-Class in its 2019 report on fraud and AML machine learning platform vendors.
About Featurespace – www.featurespace.com
Headquartered in the U.S. and U.K. and with offices in Atlanta, Cambridge and London, Featurespace™ is the world-leader in fraud prevention and creator of the ARIC™ platform, a real-time AI machine learning software that risk scores events in more than 180 countries.
The ARIC platform combines adaptive behavioural analytics and anomaly detection to automatically identify risk and catch new attacks as they happen. The increased accuracy of understanding behavior strikes the balance between improving fraud and risk detection and operational efficiencies, while also reducing the number of genuine transactions that would be incorrectly declined by as much as 70 percent.
Michael Touchton, Featurespace
U.S. Marketing Manager
+1 (423) 364-5491
Automated Financial Crime Technology can fix the bottleneck of AML transaction monitoring
Authorised Push Payments
Has the Contingent Reimbursement Model helped to protect UK consumers from Authorized Push Payment Scams?
Financial crime prevention can help Challenger Banks deliver valuable customer experiences
Mark Taylor tells Payments Cards & Mobile How Fraudsters are Attacking Open Banking
Authorised Push Payments
Don’t get caught out if the Contingent Reimbursement Model becomes compulsory
Authorised Push Payments
Featurespace Expands Global Fraud and Financial Crime Expertise with Addition of Industry Veteran
Círculo de Crédito and Featurespace Partner to Innovate in the Fight Against Application Fraud in Mexico
NatWest and Featurespace Partner for Real-Time, Enterprise-Wide Fraud Prevention and Transaction Monitoring
Elavon Selects Featurespace to Launch New Fraud Prevention Capabilities and Support PSD2 Adoption for European Merchants
Featurespace ranked 25th fastest-growing technology company in Sunday Times Hiscox Tech Track 100
Contis Establishes PSD2-Ready, Automated Fraud Detection in Record Time with Featurespace
Permanent TSB Selects Featurespace for Transaction Monitoring and Fraud Reporting Ahead of PSD2
Featurespace Introduces Adaptive Behavioral Biometrics to Solve Complex Fraud Attacks in Digital Channels
Featurespace Joins PWC Tech She Can Charter, Promoting Female Role Models in the Technology Sector
Women in Tech
Your fraud solution, your choice – more control and even better insights with ARIC™ 3.13
Featurespace Names Laura Gibson U.S. Director of Operations to Support Ongoing International Expansion
Featurespace launches international behavioral analytics fraud technology into Singapore
SKS365 Selects Featurespace’s Adaptive Behavioural Analytics To Predict And Identify Fraud
Justin Griggs at TSYS provides insights into success from their partnership with Featurespace
GDPR Becomes Reality, Consumer Data Becomes Global – Featurespace contributes to new PYMNTS eBook
Fraud prevention solution – should we build it in-house or should we buy it? Sean Neary speaks to The Paypers
Real-time machine learning solution recognised by UK’s most prestigious business awards: Queen’s Award for Enterprise- Innovation
Worldpay and Featurespace: Fighting Fraud By Finding Good Transactions Instead Of Bad Ones
Machine Learning Helps IoT Deliver a New Channel for a Better, More Secure Payments Experience
Tackling fraud trends in 2018: what to expect and what your business can do to prepare (via The Paypers)
Capital One UK’s use of TSYS Foresight Score℠ with Featurespace named ‘Best Security or Anti-Fraud Development’ at The Cards & Payments Awards 2018
Keeping fraud costs at bay: improving efficiency and saving costs with adaptive behavioural analytics
Featurespace a Sample Vendor in Gartner’s Research – “How to Begin Investing Now in Enhanced Machine-Learning Capabilities for Fraud Detection”
Don’t treat your customers like criminals: Understanding Behaviour with Machine Learning – Luke Reynolds for n>genuity
Icon Solutions partners with Featurespace to provide real-time fraud protection for instant payments
“How is machine learning helping to tackle online fraud?” – Payments & Cards Network’s e-magazine
OpenBet partners with Featurespace to improve player experience and understanding
©2020 Featurespace Limited. All rights reserved. Legal information
Trade Mark Notice: FEATURESPACE is a registered trade mark in the EU, UK and US.
ARIC is a registered trade mark in the EU and US.
The OUTSMART RISK Logo is a registered trade mark in the EU and UK. The OUTSMART RISK word mark is registered in the US.