The global pandemic has accelerated the adoption of mobile and online banking faster than anyone could have imagined. But fraud has also kept pace as bad actors play the numbers game, launching huge volleys of cybercrime attempts. Perhaps now is the time to involve the customer through “intelligent friction” to thwart fraudsters' efforts.
Even machines need to learn
The obvious response to the increase in fraud attempts is to throw more technology at the problem. However, the volume-based attacks we’re now seeing have increased at such a rate that even the new tech heroes – machine learning (ML) and artificial intelligence (AI) – are battling to keep up. In fact, the World Economic Forum estimates financial crimes could cost global citizens up to one trillion dollars each year.
The second problem is that no matter how good your ML and AI, the technology still needs a history of user behavior to predict future actions. This lack of comparison data for the huge numbers of new users ratchets up the incidences of false positives when consumers use their credit cards online, for example. The card is declined, frustrating the user to such an extent that they’re far less likely to attempt shopping online with that card again, if at all.
Machines need to experience fraud before they can learn from that fraud.
Include the experts
Fortunately, we can overcome the learning problem by involving the customer. After all, they’re the ones who are most invested in protecting their assets. It’s the customer who knows for certain whether a transaction is real or not, so who better to ask?
Of course, though, it’s a balancing act. You don’t want to inconvenience the customer too much, but they still want to be in control. This is where intelligent friction comes in. The ability to authenticate their transactions instills control, and deputizing the customer by giving them control builds trust.
Fraud isn’t a static beast, however. It’s constantly evolving as it adapts to changing technologies, and hence so must financial institutions’ digital fraud prevention solutions. Consumers though, don’t like change. They become mistrustful when the authentication process they’re accustomed to varies. So, it’s in the background that the updates need to happen. The key is finding someone to partner with who has done it before. Someone who knows the tech and knows what to expect.
The future of financial institutions
Banks play a significant role in their customers’ lives. They could leverage this position of trust, and their access to user data, to become the custodians of our digital identities. So, instead of using Facebook, for example, to log into a site, a consumer could use their bank account because that’s where the anchor of their identity is.
And, while there is room for industry standards when it comes to fraud detection and prevention, there’s no reason to wait for the industry to define what should be done. The tools are ready and waiting. The time for worrying about how customers will perceive the changes is over – if they are part of the solution, and know they will be safer, they will be on board.
At Entersekt, we believe in the power of trust. Security is at the heart of our customer-first approach to digital banking experiences. Contact us today to learn more about how we can help you make the most of the relationship you already have with your customers.