Financial Crime World

Banking Fraud Detection on the Rise in Afghanistan

Introduction

As the financial landscape in Afghanistan continues to evolve, banks and credit unions are grappling with a growing concern: banking fraud. Recent reports indicate that 52% of institutions have expressed high levels of concern about fraud, making it a top priority for the industry.

What is Banking Fraud?

Banking fraud is a type of financial crime that involves using illegal means to obtain money, assets, or other property owned by banks, credit unions, or their customers. This can include identity theft, check fraud, credit card fraud, phishing scams, and direct deposit account (DDA) fraud.

Types of Banking Fraud

  • Identity Theft: When a bad actor steals a consumer’s personal information to take money, open credit accounts, make purchases, or more.
  • Check Fraud: When a fraudster writes a bad check, forges information, or steals and alters someone else’s check.
  • Credit Card Fraud: A form of identity theft where a bad actor makes purchases or gets a cash advance in the name of an unsuspecting consumer.
  • Phishing: Malicious efforts to steal personal and account information through email or text messages.
  • DDA Fraud: When criminals monetize stolen information to open new accounts and divert funds from payroll, assistance programs, or more.

Toughest Fraud Challenges

Top concerns for banks in Afghanistan include authorized push or wire transfer payment fraud, transactional fraud, account takeover, first-party fraud, third-party fraud, and synthetic identity fraud. Without proper detection and prevention techniques, it’s challenging to keep fraudsters from perpetrating these schemes.

Banking Fraud Prevention

Detecting and preventing banking fraud involves a set of techniques and tasks that help protect customers, assets, and systems from those with malicious intent. Risk management solutions for banks identify fraudulent access attempts, suspicious transfer requests, signs of false identities, and more.

Some of the emerging trends in banking fraud prevention include:

  • Artificial Intelligence (AI) and Machine Learning (ML): Using AI and ML to identify patterns consistent with fraudulent activity.
  • Behavioral Analytics and Biometrics: Noting standard customer behaviors to flag riskier users for additional authentication and verification.
  • Leveraging Additional Data Sources: Looking beyond standard credit reports when opening credit accounts.

How to Prevent and Detect Banking Fraud

To be successful in the fight against fraud, financial institutions must:

  • Balance risk mitigation with the customer experience
  • Ensure seamless interactions across platforms for known consumers who present little to no risk
  • Leverage proper identity resolution and verification tools
  • Recognize good consumers and apply the proper fraud mitigation techniques to riskier scenarios

With Experian’s interconnected approach to fraud detection in banking, incorporating data, analytics, fraud risk scores, device intelligence, and more, you can track and assess various activities and determine where additional authentication, friction, or human intervention is required.

Learn More

Stay ahead of the curve with our latest insights on banking fraud prevention. Contact us today to learn more about how Experian can help your institution protect against financial crime.