Financial Crime World

Fraud Detection Methods for Financial Institutions in Northern Mariana Islands: A Top Concern

Staggering Levels of Concern

A staggering 52% of banks in the Northern Mariana Islands report high levels of concern about fraud, highlighting the need for robust fraud detection methods to prevent financial losses and protect consumer data. With banking fraud prevention becoming increasingly complex, financial institutions must stay ahead of the curve by investing in cutting-edge technologies.

What is Banking Fraud?

Banking fraud is a type of financial crime that uses illegal means to obtain money, assets, or other property owned or held by a bank, credit union, fintech, or other financial institution. This can include:

  • Identity theft
  • Check fraud
  • Credit card fraud
  • Phishing
  • Direct deposit account fraud

The Consequences of Banking Fraud

Banking fraud not only results in lost funds but also exposes consumer data, impacts banks’ reputations, and has larger implications for the financial system.

Top Concerns for Banks

Today, top concerns for banks include:

  • Authorized push or wire transfer payment fraud
  • Transactional fraud
  • Account takeover
  • First-party fraud
  • Third-party fraud
  • Synthetic identity fraud

Banking Fraud Prevention

Detecting and preventing banking fraud consists of 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:

  • The use of artificial intelligence (AI) and machine learning (ML)
  • Behavioral analytics and biometrics
  • Leveraging additional data sources

Real-Time Fraud Detection Tools

With real-time fraud detection tools in place, financial institutions can more easily identify good consumers and allow them to complete their requests while applying the right amount and type of friction to detect and prevent fraud.

How to Prevent and Detect Banking Fraud

To be successful in the fight against fraud and keep themselves and customers safe, 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

Experian’s Interconnected Approach

Experian offers an interconnected approach to fraud detection in banking, incorporating:

  • Data
  • Analytics
  • Fraud risk scores
  • Device intelligence
  • And more

This allows financial institutions to track and assess various activities and determine where additional authentication, friction, or human intervention is required.