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Fraudulent Transactions Plague Banking Industry in US Minor Outlying Islands

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The banking industry in the US Minor Outlying Islands is facing a significant challenge in combating fraudulent transactions. Banks and financial institutions (FIs) are constantly evaluating how to stay one step ahead of fraudsters, who target them because of their potential to provide speedy access to and transfer of funds.

According to experts, banks take two broad approaches to combatting fraud: Fraud Detection and Fraud Prevention. They tend to adopt fraud detection strategies to identify attempts by fraudsters to access an account and use fraud prevention tools to stop attempts by fraudsters to access accounts. While slightly different technologies and strategies are used, detection and prevention tools are deployed hand in hand.

The Challenge of Detecting Fraud

More and more consumers are turning to digital banking, expecting to be able to onboard and access FIs seamlessly manage their finances on any connected device. At the same time, FIs are facing a dramatic increase in sophisticated and complex cyber attacks.

Fraudsters and hackers are continually challenging the security measures that FIs have put in place to protect their sensitive customer data. For example, according to UK Finance’s 2020 report ‘Fraud – The Facts’, even though FIs in the UK do a pretty good job and prevent about 60% of all attempted fraud, fraud still poses a significant threat and causes big losses.

Four Steps to Prevent Fraud

Gemalto IdCloud risk management services are used for identity affirmation and risk-based authentication (RBA) and harness the power of four layers of intelligence. Each layer transparently analyses user and environment activities from different perspectives to identify high risks before any harm is done.

Here are the Four Steps to Prevent Fraud in banking:

Device Intelligence: This allows you to identify recurring devices accurately, detect high-risk networks and locations, and spot device anomalies that indicate fraudulent activity.
Behavioural Biometrics: This looks at inherent user behaviour and analyses how someone types, moves their mouse or holds their device to create an individual profile.
Behavioural Analytics: This analyses user habits at individual and population levels to detect unusual behaviour.
Trust Consortium: This evaluates billions of events to help you know who to trust, even if they are new to you.

Enhanced Onboarding with Risk Management

By adding identity affirmation, you can strengthen your identity proofing process security. It applies risk management technologies to analyse the environment and user behaviour to detect suspicious activities.

Enhanced Access with Risk Management

By adding smart risk management services to the access phase, the risk level of every single customer transaction is analysed, and a recommendation on the most appropriate authentication method is given.

Comply with Latest Security Regulations

Gemalto IdCloud’s risk management services are the perfect answer to the new security requirements of regulations such as PSD2 and FFIEC. It offers real-time monitoring of the authentication and transaction process risk, as required by PSD2’s regulatory technical standards (RTSs).

Data privacy regulations such as GDPR in Europe and CCPA in the US are becoming ever more stringent. Gemalto IdCloud has been designed for GDPR and CCPA compliance.

Case Studies: Digital Onboarding in Banking

For more information on how to combat fraudulent transactions in the banking industry, read our case studies on digital onboarding in banking.