Scam prevention refers to the strategies and technologies that financial institutions (FIs) use to detect, block, and mitigate modern fraud scams, like account takeover or Zelle fraud, and fraud initiated by social engineering tactics. By leveraging advanced authentication methods and real-time threat intelligence, scam prevention systems can identify and prevent scams before they cause harm.
For instance, FIs may implement context-based authentication solutions that analyze user behavior, device information, and transaction patterns to detect any unusual activity. If the system detects anything suspicious, it can prompt additional verification steps, like biometric authentication, or block the transaction entirely. A proactive scam prevention approach not only safeguards customers but also reduces the impact of fraud for FIs, minimizing fraud losses and reputational damage.
How does scam prevention improve a bank’s defenses against sophisticated fraud tactics?
A scam prevention approach that uses advanced technologies like behavioral analytics, identity proofing, and biometrics can detect and block sophisticated scams in real time. By analyzing signals like device familiarity, geolocation, and behavioral patterns, these systems can identify and block a fraudster’s attacks, such as SIM-swaps, account takeovers, authorized push payments, real-time payments, or Zelle fraud. When fraudulent behavior is detected, a modern scam prevention solution triggers additional authentication steps, such as a push notification or biometric verification, to prevent unauthorized access.
How can scam prevention improve customer satisfaction?
Scam prevention enhances customer satisfaction by providing a smoother and safer digital banking and payment experience. By using behavioral analytics and passive identity verification, customers can access their banking services without the hassle of remembering passwords or waiting for one-time passcodes (OTPs). A modern scam prevention solution can reduce or remove friction, balancing strong security with a seamless customer experience. Customers are more likely to remain loyal to a bank that offers modern, secure and user friendly authentication methods.
An innovative fraud prevention approach can help banks reduce customer churn, prevent lost deposits, and strengthen their reputation.
What are the main use cases that scam prevention solutions can protect?
Scam prevention strategies play a vital role in protecting banks, credit unions and merchants from increasingly sophisticated banking and payment fraud:
Secure account access: Protect customers with strong, silent authentication that leverages cryptography.
Secure payments and transfers: Determine the level of risk in real-time and respond with the most appropriate authentication challenge.
Safeguard against social engineering attacks: Use behavioral analytics to spot suspicious activity on a customer level and step up authentication if risk is high.
Additional resources:
Blog: Hyper-personalized authentication — digital transformation’s role in scam prevention