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Banks Can Boost Customer Identification and Verification by Integrating Automation and Analytics
In an effort to stay ahead of the curve in the fight against financial crime and fraud, banks are turning to automation and analytics to enhance customer identification and verification processes.
Leveraging Artificial Intelligence and Machine Learning
Artificial intelligence (AI) and machine learning algorithms can be used to analyze large amounts of data in real-time, identifying patterns and correlations that may indicate fraudulent activity. This information can then be overlaid onto existing rules-based solutions, reducing the number of false positives and allowing investigators to focus on actual incidents.
Improving Predictive Analytics
The integration of customer information from various sources also enables banks to improve their predictive analytics capabilities. For example, by analyzing data related to credential attacks, account takeovers, and criminal money movements, banks can identify potential risks and take proactive measures to prevent them.
Unified Risk Management for Fraud, Financial Crime, and Cybersecurity
A unified approach to fraud risk management is essential for banks seeking to stay ahead of the evolving landscape of financial crime. By integrating their cybersecurity and fraud units, banks can deploy real-time risk scoring and transaction monitoring more effectively, preventing potential regulatory breaches.
This integrated approach also enables banks to optimize the customer experience, which is critical in fostering digital trust. Survey after survey has shown that customers value banks that perform well on fraud prevention, and a unified risk management strategy can help build this trust by providing a seamless and secure experience.
A Holistic View of Financial Crime
To achieve a holistic view of financial crime, banks must adopt a transformed operating model that integrates business, operations, security, and risk teams. This requires a deep understanding of the evolving landscape of financial crime, including the importance of independent oversight and challenge through clearly defined lines of defense.
Key Questions for Banks
As banks design their journeys toward a unified operating model for financial crimes, fraud, and cybersecurity, they must answer key questions about processes and activities, people and organization, data and technology, and governance. Some of these questions include:
- What are the key processes or activities to be conducted for customer identification and authentication?
- Who are the relevant stakeholders in each line of defense?
- What skills and how many people are needed to support the activities?
- What shared activities should be housed together?
- What is the optimal reporting structure for each type of financial crime?
By answering these questions, banks can create a target risk operating model that enables efficient intelligence sharing and collaborative responses to threats. Ultimately, a unified approach to fraud risk management will help banks stay ahead of the curve in the fight against financial crime and fraud.