Fraud Decisioning Goes Omnichannel

“Banking is rapidly becoming more omnichannel, and FIs need to be sure they can safeguard customers across all the products through which they access their financial services,” according to the May 2020 FI Fraud Decisioning Playbook, produced by PYMNTS and sponsored by Simility.

Consumers now demand choice, flexibility and convenience in banking, and that’s what omnichannel offers. But in a period of utter financial disruption and confusion, fraudsters see a veritable playground of access points and theft opportunities in omnichannel environments.

The latest FI Fraud Decisioning Playbook details how financial institutions (FIs) are using advanced fraud decisioning systems to detect bad actors from good, removing friction while keeping account holders safe from the attacks that have proliferated over the first half of 2020.

A Unified Front

Of the new and modified attack vectors seen during the pandemic, cross-channel scams are proliferating. This tends to present as a mixed bag of card-not-present (CNP) fraud, screen-scraping, phishing, brute force and the other “usual suspects” of hack attacks, but are used in novel ways to fool discrete legacy fraud tools that are disparate and siloed.

For this reason, more FIs are now moving to unified platforms that analyze freely across all datasets using artificial intelligence (AI) and machine learning (ML).

“FIs can stay ahead of cross-channel cybercrime by connecting the dots between suspicious activities on different platforms or customer contact points, and tools that assess patterns to determine which are outliers and which are core elements of strong fraud-fighting approaches,” the Tracker states. “Such tools could involve using ML-based solutions that monitor customers’ activities across devices and with ATMs to create comprehensive pictures of their normal behaviors.”

It’s a game of inches, but in the financial sector, small wins add up to millions in thwarted fraud attempts. “One FI reported that an omnichannel approach to assessing its riskiest digital transactions helped it detect attempted fraudulent logins 3.6 percent more often, for example, and identify 1 percent more fraudulent payment attempts overall,” the new Tracker states.

In With the New

Like so many aspects of banking in the post-pandemic era, longstanding inefficiencies in fraud decisioning are being targeted by banks, credit unions (CUs) and other FIs as they harden their systems against well-equipped cybercrooks, including a rash of state-level hackers that was recently detected.

With the banking landscape more competitive than ever, between challenger banks and a sea of standalone payment, investment and savings apps, digital transformation is not optional.

“Omnichannel offerings’ convenience means consumers will become more interested in them over time, and they may want access to even more channels as voice assistants and other technologies gain popularity as banking methods,” the FI Fraud Decisioning Playbook states.

“FIs cannot expect the fraud-fighting tools that worked in the past to keep these new models safe, though, and methods siloed by channel will leave them guessing about whether criminal schemes are underway. Cross-channel data sharing, behavioral analysis and pattern detection are thus proving key to enabling flexible, convenient omnichannel banking access.”