Mastercard\u00a0has introduced what it says are new protections against real-time payment scams.
\nThe update to the company\u2019s Consumer Fraud Risk (CFR) solution,\u00a0announced\u00a0Tuesday (Sept. 24), uses artificial intelligence (AI) to provide British banks with more visibility to prevent fraudulent transactions.
\nThe announcement comes just days ahead of new rules requiring U.K. financial institutions to\u00a0reimburse victims\u00a0of authorized push payment (APP) fraud, which Mastercard notes is typically triggered by a fictitious website, email, text message or phone call. Such scams cost British\u00a0consumers $607 million\u00a0in 2023.
\n\u201cFraudsters have long sought to deceive the consumer through scam websites and fictitious deals,\u201d said Mastercard Executive Vice President, Security Solutions\u00a0Johan Gerber.
\n\u201cThat\u2019s why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defense \u2014 helping them better identify and stop scams in their tracks.\u201d
\nThe company says its solution has since last year helped 11 British banks identify and prevent scams. The tool works by scanning multiple data points associated with a transaction and providing a real-time risk score to the sender\u2019s bank.
\n\u201cThe new, additional AI enhancements to Consumer Fraud Risk provide the receiving banks the same score within seconds, making it possible for them to detect when a payment may be destined for an account used by fraudsters, known as a mule account,\u201d Mastercard added, noting that it plans to expand the fraud risk prevention globally \u201cwithin the year.\u201d
\nMastercard\u2019s updated offering comes as financial institutions (FIs) are increasingly turning to AI to bolster their\u00a0fraud prevention capabilities.
\n\u201cThe adoption of AI and machine learning (ML) technologies is transforming how transactions are monitored and secured,\u201d PYMNTS wrote last month.
\n\u201cA significant\u00a094% of payments professionals\u00a0view AI primarily as a tool for improving fraud detection. AI\u2019s predictive analytics capabilities help identify potential fraud by analyzing user behavior patterns and transaction anomalies.\u201d
\nAside from fraud detection, AI is being employed for personalized customer service and operational efficiencies. And a survey last year by FICO survey found that a little more than three-quarters of customers expect FIs to use AI for better fraud prevention, spotlighting the increasing demand for advanced security measures.
\n\u201cAI\u2019s ability to provide real-time alerts about suspicious activities further underscores its critical role in the future of secure and efficient payments,\u201d PYMNTS wrote.
\nFor all PYMNTS AI coverage, subscribe to the daily\u00a0AI\u00a0Newsletter.
\nThe post Mastercard Taps AI to Tackle UK APP Fraud Epidemic appeared first on PYMNTS.com.
\n", "content_text": "Mastercard\u00a0has introduced what it says are new protections against real-time payment scams.\nThe update to the company\u2019s Consumer Fraud Risk (CFR) solution,\u00a0announced\u00a0Tuesday (Sept. 24), uses artificial intelligence (AI) to provide British banks with more visibility to prevent fraudulent transactions.\nThe announcement comes just days ahead of new rules requiring U.K. financial institutions to\u00a0reimburse victims\u00a0of authorized push payment (APP) fraud, which Mastercard notes is typically triggered by a fictitious website, email, text message or phone call. Such scams cost British\u00a0consumers $607 million\u00a0in 2023.\n\u201cFraudsters have long sought to deceive the consumer through scam websites and fictitious deals,\u201d said Mastercard Executive Vice President, Security Solutions\u00a0Johan Gerber.\n\u201cThat\u2019s why, at Mastercard, we are turbocharging our technology, providing banks additional lines of defense \u2014 helping them better identify and stop scams in their tracks.\u201d\nThe company says its solution has since last year helped 11 British banks identify and prevent scams. The tool works by scanning multiple data points associated with a transaction and providing a real-time risk score to the sender\u2019s bank.\n\u201cThe new, additional AI enhancements to Consumer Fraud Risk provide the receiving banks the same score within seconds, making it possible for them to detect when a payment may be destined for an account used by fraudsters, known as a mule account,\u201d Mastercard added, noting that it plans to expand the fraud risk prevention globally \u201cwithin the year.\u201d\nMastercard\u2019s updated offering comes as financial institutions (FIs) are increasingly turning to AI to bolster their\u00a0fraud prevention capabilities.\n\u201cThe adoption of AI and machine learning (ML) technologies is transforming how transactions are monitored and secured,\u201d PYMNTS wrote last month.\n\u201cA significant\u00a094% of payments professionals\u00a0view AI primarily as a tool for improving fraud detection. AI\u2019s predictive analytics capabilities help identify potential fraud by analyzing user behavior patterns and transaction anomalies.\u201d\nAside from fraud detection, AI is being employed for personalized customer service and operational efficiencies. And a survey last year by FICO survey found that a little more than three-quarters of customers expect FIs to use AI for better fraud prevention, spotlighting the increasing demand for advanced security measures.\n\u201cAI\u2019s ability to provide real-time alerts about suspicious activities further underscores its critical role in the future of secure and efficient payments,\u201d PYMNTS wrote.\n\nFor all PYMNTS AI coverage, subscribe to the daily\u00a0AI\u00a0Newsletter.\n\nThe post Mastercard Taps AI to Tackle UK APP Fraud Epidemic appeared first on PYMNTS.com.", "date_published": "2024-09-24T09:11:09-04:00", "date_modified": "2024-09-24T09:11:09-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2023/10/Mastercard.jpg", "tags": [ "AI", "APP Fraud", "artificial intelligence", "authorized push payment fraud", "banking", "Banks", "EMEA", "fraud", "Fraud Prevention", "MasterCard", "News", "PYMNTS News", "Technology", "uk", "UK banks", "What's Hot" ] }, { "id": "https://www.pymnts.com/?p=2101423", "url": "https://www.pymnts.com/fraud-prevention/2024/fico-and-jersey-telecom-team-to-combat-app-fraud/", "title": "FICO and Jersey Telecom Team to Combat APP Fraud\u00a0", "content_html": "FICO\u00a0is working with\u00a0Jersey Telecom\u00a0(JT) to push back against authorized push payment fraud.
\nThe analytics software company said Wednesday (Sept. 18) it has collaborated with the British Channel Islands-based telecom to\u00a0develop a solution\u00a0that allows for \u201cdirect, near real-time intervention\u201d to protect customers against fraud.
\n\u201cFICO and JT worked with leading UK banks to identify the most relevant telephony signals that indicate an active scam,\u201d the company said in a news release.
\nThe term \u201ctelephony\u201d refers to the technology that lets people communicate across long distances via things like voice or fax.
\nFICO\u2019s Customer Communications Service Scam Signal, the release notes, is available in Jersey, the U.K. and Spain, and is the first real-time application of telephony data being used with customer and payment data to prevent authorized push payment (APP) fraud, in which consumers are duped into sending authorized payments to scammers.
\n\u201cThis type of fraud is growing around the world; 2023 losses in the UK alone\u00a0reached \u00a3460 million,\u201d said\u00a0Clare Messenger, head of mobile intelligence solutions at JT. \u201cTo protect customers from being caught by such scams, the new FICO and JT solution enables direct intervention with the customer to quickly determine if a payment should proceed.\u201d
\nAccording to the release, FICO\u2019s analysis uncovered strong correlations between a customer\u2019s mobile phone behavior and the likelihood that a scam was occurring.
\nFor instance, a victim might be \u201cactively coached through security or manipulated by a fraudster into making a payment\u201d during a phone conversation, the company said.
\nScam Signal, the release added, uses advanced analysis of real-time network data coupled with customer and payment data, during live transactions, to detect and mitigate social engineering attempts aimed at tricking and defrauding consumers.
\nAPP fraud\u2019s prevalence in the U.K. has led regulators there to introduce new\u00a0reimbursement rules\u00a0for banks and payment companies. Those rules are set to go into effect next month, requiring financial institutions to repay victims up to 85,000 pounds.
\nIn other fraud prevention news, PYMNTS earlier this week looked at the rising threat of\u00a0invoice fraud, targeting companies\u2019 finance departments.
\nFraudsters \u201cwill call your back-office staff who are\u00a0not trained\u00a0in payments fraud prevention and try to communicate false information over the phone. And these staffers, they are great, smart, hardworking people, but they do not have the tools and that is why the fraudsters are attacking them,\u201d\u00a0Ernest Rolfson, founder and CEO of\u00a0Finexio, told PYMNTS in July.
\nThe post FICO and Jersey Telecom Team to Combat APP Fraud\u00a0 appeared first on PYMNTS.com.
\n", "content_text": "FICO\u00a0is working with\u00a0Jersey Telecom\u00a0(JT) to push back against authorized push payment fraud.\nThe analytics software company said Wednesday (Sept. 18) it has collaborated with the British Channel Islands-based telecom to\u00a0develop a solution\u00a0that allows for \u201cdirect, near real-time intervention\u201d to protect customers against fraud.\n\u201cFICO and JT worked with leading UK banks to identify the most relevant telephony signals that indicate an active scam,\u201d the company said in a news release.\nThe term \u201ctelephony\u201d refers to the technology that lets people communicate across long distances via things like voice or fax.\nFICO\u2019s Customer Communications Service Scam Signal, the release notes, is available in Jersey, the U.K. and Spain, and is the first real-time application of telephony data being used with customer and payment data to prevent authorized push payment (APP) fraud, in which consumers are duped into sending authorized payments to scammers.\n\u201cThis type of fraud is growing around the world; 2023 losses in the UK alone\u00a0reached \u00a3460 million,\u201d said\u00a0Clare Messenger, head of mobile intelligence solutions at JT. \u201cTo protect customers from being caught by such scams, the new FICO and JT solution enables direct intervention with the customer to quickly determine if a payment should proceed.\u201d\nAccording to the release, FICO\u2019s analysis uncovered strong correlations between a customer\u2019s mobile phone behavior and the likelihood that a scam was occurring.\nFor instance, a victim might be \u201cactively coached through security or manipulated by a fraudster into making a payment\u201d during a phone conversation, the company said.\nScam Signal, the release added, uses advanced analysis of real-time network data coupled with customer and payment data, during live transactions, to detect and mitigate social engineering attempts aimed at tricking and defrauding consumers.\nAPP fraud\u2019s prevalence in the U.K. has led regulators there to introduce new\u00a0reimbursement rules\u00a0for banks and payment companies. Those rules are set to go into effect next month, requiring financial institutions to repay victims up to 85,000 pounds.\nIn other fraud prevention news, PYMNTS earlier this week looked at the rising threat of\u00a0invoice fraud, targeting companies\u2019 finance departments.\nFraudsters \u201cwill call your back-office staff who are\u00a0not trained\u00a0in payments fraud prevention and try to communicate false information over the phone. And these staffers, they are great, smart, hardworking people, but they do not have the tools and that is why the fraudsters are attacking them,\u201d\u00a0Ernest Rolfson, founder and CEO of\u00a0Finexio, told PYMNTS in July.\nThe post FICO and Jersey Telecom Team to Combat APP Fraud\u00a0 appeared first on PYMNTS.com.", "date_published": "2024-09-18T10:35:10-04:00", "date_modified": "2024-09-18T10:35:10-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2023/05/FICO.jpg", "tags": [ "app", "authorized push payment fraud", "FICO", "fraud", "Fraud Prevention", "Jersey Telecom", "News", "partnerships", "phone scams", "PYMNTS News", "scams", "What's Hot" ] }, { "id": "https://www.pymnts.com/?p=2096809", "url": "https://www.pymnts.com/fraud-prevention/2024/galileo-deploys-anti-fraud-tools-for-banks-and-fintechs/", "title": "Galileo Deploys Anti-Fraud Tools for Banks and FinTechs", "content_html": "Galileo\u00a0has introduced a pair of anti-fraud tools for banks, FinTechs and businesses.
\nThe new tools,\u00a0announced\u00a0Tuesday (Sept. 10), are designed to offer real-time fraud detection and risk management services amid a surge in digital transactions and evolving cyber threats.
\nFirst up is Galileo Instant Verification Engine (GIVE), which is designed to provide real-time verification of external bank accounts and ownership. Able to be used on its own or as an integration with Galileo\u2019s payment risk platform, GIVE lets businesses stop fraud by quickly verifying account existence, status, and ownership before transactions are processed.
\n\u201cGIVE is further enhanced by its integration with the Galileo Payment Risk Platform, which uses a sophisticated Transaction Decision Rules Engine,\u201d the company said.
\n\u201cThis engine applies customizable models, rules and profiles to each transaction, allowing for real-time, automated fraud prevention decisions tailored to the specific needs and risk appetite of each business.\u201d
\nGalileo has also introduced Transaction Risk GScore, a machine-learning-based offering that assesses the risk of card transactions in real time, adding \u201ca layer of fraud signals\u201d to the payment risk platform while letting customers \u201cdetermine the risk appetite based on the multiple model responses.\u201d
\nMeanwhile, PYMNTS spoke recently with\u00a0Max Spivakovsky, senior director of strategy and operations, global payments risk management and onboarding at Galileo, about the tightropes walked by banks as they try to balance delivering digital services and payments choices while also preventing fraud.
\nThat balancing act requires financial institutions (FIs) to use both proactive and reactive approaches, as well as technological tools, as they defend themselves while providing a personalized, convenient customer experience, Spivakovsky said.
\n\u201cThe\u00a0legacy solutions\u00a0just don\u2019t work anymore,\u201d he told PYMNTS. \u201cLeveraging a single tool used to be the \u2018paramount\u2019 strategy of fraud mitigation years ago, but now it\u2019s just not applicable \u2026 the FIs must think about fighting fraud with a holistic perspective.\u201d
\nThe holistic perspective can pay dividends while safeguarding the FI from financial losses and\u00a0reputational risk, he added.
\n\u201cThe client experience drives the engagement, and utilization of [banking] apps and programs,\u201d Spivakovsky said.
\nHe also noted that the financial services sector is shifting away from an era when banks took charge of everything and kept all data and processes on site, toward relying on FinTechs and other providers to provide real-time\u00a0fraud prevention and identify fraud and scam patterns before they hurt banks and their customers.
\nThe post Galileo Deploys Anti-Fraud Tools for Banks and FinTechs appeared first on PYMNTS.com.
\n", "content_text": "Galileo\u00a0has introduced a pair of anti-fraud tools for banks, FinTechs and businesses.\nThe new tools,\u00a0announced\u00a0Tuesday (Sept. 10), are designed to offer real-time fraud detection and risk management services amid a surge in digital transactions and evolving cyber threats.\nFirst up is Galileo Instant Verification Engine (GIVE), which is designed to provide real-time verification of external bank accounts and ownership. Able to be used on its own or as an integration with Galileo\u2019s payment risk platform, GIVE lets businesses stop fraud by quickly verifying account existence, status, and ownership before transactions are processed.\n\u201cGIVE is further enhanced by its integration with the Galileo Payment Risk Platform, which uses a sophisticated Transaction Decision Rules Engine,\u201d the company said.\n\u201cThis engine applies customizable models, rules and profiles to each transaction, allowing for real-time, automated fraud prevention decisions tailored to the specific needs and risk appetite of each business.\u201d\nGalileo has also introduced Transaction Risk GScore, a machine-learning-based offering that assesses the risk of card transactions in real time, adding \u201ca layer of fraud signals\u201d to the payment risk platform while letting customers \u201cdetermine the risk appetite based on the multiple model responses.\u201d\nMeanwhile, PYMNTS spoke recently with\u00a0Max Spivakovsky, senior director of strategy and operations, global payments risk management and onboarding at Galileo, about the tightropes walked by banks as they try to balance delivering digital services and payments choices while also preventing fraud.\nThat balancing act requires financial institutions (FIs) to use both proactive and reactive approaches, as well as technological tools, as they defend themselves while providing a personalized, convenient customer experience, Spivakovsky said.\n\u201cThe\u00a0legacy solutions\u00a0just don\u2019t work anymore,\u201d he told PYMNTS. \u201cLeveraging a single tool used to be the \u2018paramount\u2019 strategy of fraud mitigation years ago, but now it\u2019s just not applicable \u2026 the FIs must think about fighting fraud with a holistic perspective.\u201d\nThe holistic perspective can pay dividends while safeguarding the FI from financial losses and\u00a0reputational risk, he added.\n\u201cThe client experience drives the engagement, and utilization of [banking] apps and programs,\u201d Spivakovsky said.\nHe also noted that the financial services sector is shifting away from an era when banks took charge of everything and kept all data and processes on site, toward relying on FinTechs and other providers to provide real-time\u00a0fraud prevention and identify fraud and scam patterns before they hurt banks and their customers.\nThe post Galileo Deploys Anti-Fraud Tools for Banks and FinTechs appeared first on PYMNTS.com.", "date_published": "2024-09-10T12:18:36-04:00", "date_modified": "2024-09-10T12:18:36-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2023/03/fraud-prevention.jpg", "tags": [ "account verification", "Banks", "FinTech", "Fraud Prevention", "Galileo", "Galileo Financial Technologies", "identity verification", "News", "PYMNTS News", "risk management", "What's Hot" ] }, { "id": "https://www.pymnts.com/?p=2096237", "url": "https://www.pymnts.com/fraud-prevention/2024/cooking-the-books-preventing-insider-fraud-with-back-office-automation/", "title": "Cooking the Books: Preventing Insider Fraud With Back-Office Automation", "content_html": "2024 was the year cybersecurity evolved from an IT function to an organization-wide risk issue.
\nBut while external cyberattacks dominate headlines, insider fraud \u2014 the deliberate exploitation of an organization’s systems by employees or individuals with internal access \u2014 presents an equally formidable challenge.
\nAnd as a settlement announced last week (Sept. 5) between CIRCOR International Inc. and the U.S. Securities and Exchange Commission (SEC) reveals, inside fraudsters tend to both target and operate within their organization\u2019s finance and accounting departments.
\nPer the SEC complaint, CIRCOR\u2019s finance director \u201cconcealed his misconduct by manipulating account reconciliations, falsifying certifications, fabricating bank confirmation documents, and misleading CIRCOR\u2019s management and independent auditors.\u201d
\nEmployees in finance and accounting best understand their organization\u2019s financial processes, internal controls and loopholes. This insight allows them to exploit weaknesses without raising suspicion. Fraudsters hiding in finance departments can manipulate accounting records, hide unauthorized transactions or create false entries, making it difficult for regular audits or oversight to detect discrepancies.
\nIn some organizations, especially smaller firms, finance staff may have overlapping roles, such as handling both payments and reconciliations, reducing checks and balances that could detect fraudulent activity.
\nAll this combines to make insider fraud notoriously difficult to detect, often requiring businesses to wade through vast volumes of data and navigate a myriad of complexities to catch early warning signs.
\nRead more:\u00a0Why Business Email Compromise Scams Target Valuable B2B Relationships
\nOrganizations that invest in automation and data-driven solutions will be better equipped to protect their assets, reputation and long-term success.
\nThat\u2019s because identifying potential red flags and malicious activities through traditional manual review methods is a time-consuming, resource-intensive endeavor. The sheer volume of transactions, interactions and data points within modern organizations further complicates this task, making the use of automated systems and data-driven approaches indispensable.
\nOne of the primary benefits of automation is its ability to continuously scan data for irregularities. Automated systems can be programmed to detect anomalies in real time, flagging unusual patterns such as unauthorized access to sensitive information, unusual financial transactions, or deviations from typical employee behavior. With machine learning (ML) and artificial intelligence (AI) technologies, these systems become smarter over time, refining their algorithms to improve detection accuracy.
\nPYMNTS Intelligence finds that\u00a0over a quarter of surveyed firms (27%) use AI for high-risk, complex tasks, while nearly 90% have at least one high-impact use case for the innovative technology.
\nAutomated fraud detection tools can also aggregate data from multiple sources, such as financial transactions, employee communications and operational logs, to form a holistic view of activities across the organization. By cross-referencing different data sets, these systems can identify potential risks that might be overlooked by manual analysis.
\n\u201cOne of the biggest differences between the consumer world \u2026 and the enterprise world is that different people are allowed\u00a0different access to different information,\u201d\u00a0Eddie Zhou, head of AI at\u00a0Glean, told PYMNTS. \u201cPermissions are a first-class thing you have to think about with enterprises.\u201d
\nFor example, an employee making excessive changes to financial records or attempting to access confidential customer data outside of normal business hours could trigger an automatic alert. These real-time insights enable organizations to respond promptly, limiting the damage of any fraudulent activity.
\nRead more: Behind Company Walls: Protecting Against the Evolving Insider Fraud Threat
\nIn\u00a0interviews\u00a0for the \u201cWhat\u2019s Next in Payments\u201d series, executives stressed\u00a0to PYMNTS\u00a0that a multilayered security strategy, also known as\u00a0defense in depth, is crucial for reducing risks at various levels. This approach means implementing multiple defensive measures across the enterprise network.
\nOne of those key defensive layers is increasingly the digitizing of legacy and paper-based payment workflows.
\nResearch from PYMNTS Intelligence has shown that\u00a0virtual cards and digital spend management solutions can help finance departments close the books faster while guarding against fraud.
\n\u201cIn today\u2019s operating environment, being reactive leaves firms at a disadvantage. Fortunately, virtual cards are changing the game for businesses by letting them proactively \u2014 and easily \u2014 control their spend,\u201d\u00a0Dan Hanks, vice president of global product development at\u00a0i2c, said in\u00a0an interview with PYMNTS.
\nBy leveraging real-time monitoring, predictive analytics and behavioral data \u2014 all things that data-rich payments environments provide \u2014 businesses can enhance their ability to detect and mitigate insider threats, particularly those within the finance function.
\nThe post Cooking the Books: Preventing Insider Fraud With Back-Office Automation appeared first on PYMNTS.com.
\n", "content_text": "2024 was the year cybersecurity evolved from an IT function to an organization-wide risk issue.\nBut while external cyberattacks dominate headlines, insider fraud \u2014 the deliberate exploitation of an organization’s systems by employees or individuals with internal access \u2014 presents an equally formidable challenge.\nAnd as a settlement announced last week (Sept. 5) between CIRCOR International Inc. and the U.S. Securities and Exchange Commission (SEC) reveals, inside fraudsters tend to both target and operate within their organization\u2019s finance and accounting departments.\nPer the SEC complaint, CIRCOR\u2019s finance director \u201cconcealed his misconduct by manipulating account reconciliations, falsifying certifications, fabricating bank confirmation documents, and misleading CIRCOR\u2019s management and independent auditors.\u201d\nEmployees in finance and accounting best understand their organization\u2019s financial processes, internal controls and loopholes. This insight allows them to exploit weaknesses without raising suspicion. Fraudsters hiding in finance departments can manipulate accounting records, hide unauthorized transactions or create false entries, making it difficult for regular audits or oversight to detect discrepancies.\nIn some organizations, especially smaller firms, finance staff may have overlapping roles, such as handling both payments and reconciliations, reducing checks and balances that could detect fraudulent activity.\nAll this combines to make insider fraud notoriously difficult to detect, often requiring businesses to wade through vast volumes of data and navigate a myriad of complexities to catch early warning signs.\nRead more:\u00a0Why Business Email Compromise Scams Target Valuable B2B Relationships\nData and Automation Key to Effective Fraud Prevention\nOrganizations that invest in automation and data-driven solutions will be better equipped to protect their assets, reputation and long-term success.\nThat\u2019s because identifying potential red flags and malicious activities through traditional manual review methods is a time-consuming, resource-intensive endeavor. The sheer volume of transactions, interactions and data points within modern organizations further complicates this task, making the use of automated systems and data-driven approaches indispensable.\nOne of the primary benefits of automation is its ability to continuously scan data for irregularities. Automated systems can be programmed to detect anomalies in real time, flagging unusual patterns such as unauthorized access to sensitive information, unusual financial transactions, or deviations from typical employee behavior. With machine learning (ML) and artificial intelligence (AI) technologies, these systems become smarter over time, refining their algorithms to improve detection accuracy.\nPYMNTS Intelligence finds that\u00a0over a quarter of surveyed firms (27%) use AI for high-risk, complex tasks, while nearly 90% have at least one high-impact use case for the innovative technology.\nAutomated fraud detection tools can also aggregate data from multiple sources, such as financial transactions, employee communications and operational logs, to form a holistic view of activities across the organization. By cross-referencing different data sets, these systems can identify potential risks that might be overlooked by manual analysis.\n\u201cOne of the biggest differences between the consumer world \u2026 and the enterprise world is that different people are allowed\u00a0different access to different information,\u201d\u00a0Eddie Zhou, head of AI at\u00a0Glean, told PYMNTS. \u201cPermissions are a first-class thing you have to think about with enterprises.\u201d\nFor example, an employee making excessive changes to financial records or attempting to access confidential customer data outside of normal business hours could trigger an automatic alert. These real-time insights enable organizations to respond promptly, limiting the damage of any fraudulent activity.\nRead more: Behind Company Walls: Protecting Against the Evolving Insider Fraud Threat\nProtecting Against the Ongoing Insider Fraud Threat\nIn\u00a0interviews\u00a0for the \u201cWhat\u2019s Next in Payments\u201d series, executives stressed\u00a0to PYMNTS\u00a0that a multilayered security strategy, also known as\u00a0defense in depth, is crucial for reducing risks at various levels. This approach means implementing multiple defensive measures across the enterprise network.\nOne of those key defensive layers is increasingly the digitizing of legacy and paper-based payment workflows.\nResearch from PYMNTS Intelligence has shown that\u00a0virtual cards and digital spend management solutions can help finance departments close the books faster while guarding against fraud.\n\u201cIn today\u2019s operating environment, being reactive leaves firms at a disadvantage. Fortunately, virtual cards are changing the game for businesses by letting them proactively \u2014 and easily \u2014 control their spend,\u201d\u00a0Dan Hanks, vice president of global product development at\u00a0i2c, said in\u00a0an interview with PYMNTS.\nBy leveraging real-time monitoring, predictive analytics and behavioral data \u2014 all things that data-rich payments environments provide \u2014 businesses can enhance their ability to detect and mitigate insider threats, particularly those within the finance function.\nThe post Cooking the Books: Preventing Insider Fraud With Back-Office Automation appeared first on PYMNTS.com.", "date_published": "2024-09-09T14:40:18-04:00", "date_modified": "2024-09-09T14:40:18-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2024/09/insider-fraud-automation-fraud.jpg", "tags": [ "AI", "artificial intelligence", "automation", "Cybersecurity", "data analysis", "fraud", "fraud detection", "Fraud Prevention", "insider fraud", "News", "PYMNTS News", "Security" ] }, { "id": "https://www.pymnts.com/?p=2095387", "url": "https://www.pymnts.com/fraud-prevention/2024/new-ai-system-aims-to-detect-financial-fraud-across-corporate-networks/", "title": "New AI System Aims to Detect Financial Fraud Across Corporate Networks", "content_html": "Researchers have developed a new artificial intelligence (AI) system to detect accounting fraud within individual companies and across supply chains and industries.
\nThe machine learning technique FraudGCN analyzes patterns in financial data and corporate relationships to identify and predict fraudulent activities. It uses graph theory and machine learning to examine the web of relationships between firms, their auditors and industry peers.
\n\u201cIt\u2019s an unending, mathematical arms race between the authorities and the fraudsters,\u201d Chenxu Wang, lead author of the paper and an associate professor with the School of Software Engineering and the Key Lab of Intelligent Networks and Network Security at Xi\u2019an Jiaotong University, said in a news release.
\nThe development comes as financial markets grapple with the impact of accounting fraud. A PYMNTS report reveals that 62% of financial institutions with over $5 billion in assets report increased financial crimes, exposing growing vulnerabilities in the U.S. banking sector. As methods for perpetrating fraud evolve, including criminals\u2019 potential use of AI, there is ongoing interest in developing more effective detection methods.
\nTraditional fraud detection methods often rely on audits, which can be labor intensive and may struggle to differentiate between genuine business success and manipulated figures. These hurdles means that many firms may go unchecked for extended periods.
\nPaul Wnek, founder, CEO and principal solutions architect at ExpandAP, told PYMMTS there are many common types of fraud in businesses: \u201cInvoice fraud, such as fictitious invoices for goods or services that were never delivered or legitimate invoices that are altered to divert funds. Vendor fraud, such as setting up fake vendors to receive payments for nonexistent goods or services or kickbacks to award vendors or employees for approving contracts or invoices. Payment fraud, which can occur when fraudsters gain access to payment systems or manipulate approval processes to authorize payments fraudulently.\u201d
\nThese schemes can be challenging to detect using conventional methods.
\n\u201cWhat is needed is an effective and accurate algorithm to automatically identify accounting fraud, and leave the days of random auditing behind,\u201d said Mengqin Wang, another researcher involved in the FraudGCN project, according to the release.
\nFraudGCN attempts to address this by constructing multi-relational graphs representing company connections. This allows the system to analyze patterns across corporate networks.
\nWhen tested on data from Chinese listed companies, the researchers found that FraudGCN outperformed current approaches by a margin of 3.15% to 3.86%.
\nHowever, the practical implications of these improvements in fraud detection are still unclear.
\nAs AI\u2019s role in fraud detection expands, experts note its potential for both detecting and aiding fraud. Joe Stephenson, director of digital intelligence at Intertel, discusses AI\u2019s dual nature in this context.
\n\u201cIn the insurance industry, we are in the business of selling, and because of this, often overlook potential implications emerging technologies like artificial intelligence may have on claims,\u201d Stephenson told PYMNTS. \u201cWhile AI is great for underwriting, we are also seeing criminals leverage ChatGPT and AI to advance fraudulent activity, whether it be through the development of synthetic IDs or metadata.\u201d
\nThis introduces new challenges, as Stephenson explained: \u201cMetadata isn\u2019t traditional, and the use of social media makes it easy for any person to exaggerate claims or organize criminal groups.\u201d
\nHowever, AI can also be leveraged to parse through large volumes of data.
\n\u201cAdvanced algorithms can scan and analyze social media activity, identifying patterns and anomalies that might go unnoticed by human investigators,\u201d Stephenson said.
\nThe \u201cFinancial Fraud Prevention Playbook\u201d by PYMNTS examines how financial institutions can leverage advanced technologies like behavioral analytics and machine learning to combat digital-age fraud tactics, including AI-powered schemes, malicious bots and synthetic identities that evade traditional security measures.
\nAlongside AI detection tools, the industry also implements automation in financial processes as a preventive measure.
\n\u201cAutomated accounting systems built with best practice security measures offer built-in fraud detection capabilities, such as anomaly detection and invoice matching algorithms,\u201d Wnek said. \u201cThe best platforms are one-stop shops for all AP tasks, leading to a decrease in the number of systems between which data needs to pass through.\u201d
\nThis shift toward automation is an ongoing trend in the finance industry.
\n\u201cThough traditionally change-averse, accounting teams have started to recognize the value of automation in improving the efficiency and accuracy of processes like accounts payable (AP) and accounts receivable (AR),\u201d Wnek said. \u201cAP automation cuts that line item completely, reducing costs anywhere from 40-95%.\u201d
\nAdditionally, by reducing manual interventions in financial processes, automation may decrease opportunities for certain types of fraud.
\nHowever, the adoption of these technologies has its challenges.
\n\u201cThe two biggest barriers to digitizing AP and AR adoption are cost and complexity,\u201d Wnek said. \u201cBut these barriers are easily alleviated when businesses consider the return on their investment compared to outsourcing customer support and finance processing.\u201d
\nThe post New AI System Aims to Detect Financial Fraud Across Corporate Networks appeared first on PYMNTS.com.
\n", "content_text": "Researchers have developed a new artificial intelligence (AI) system to detect accounting fraud within individual companies and across supply chains and industries.\nThe machine learning technique FraudGCN analyzes patterns in financial data and corporate relationships to identify and predict fraudulent activities. It uses graph theory and machine learning to examine the web of relationships between firms, their auditors and industry peers.\n\u201cIt\u2019s an unending, mathematical arms race between the authorities and the fraudsters,\u201d Chenxu Wang, lead author of the paper and an associate professor with the School of Software Engineering and the Key Lab of Intelligent Networks and Network Security at Xi\u2019an Jiaotong University, said in a news release.\nThe development comes as financial markets grapple with the impact of accounting fraud. A PYMNTS report reveals that 62% of financial institutions with over $5 billion in assets report increased financial crimes, exposing growing vulnerabilities in the U.S. banking sector. As methods for perpetrating fraud evolve, including criminals\u2019 potential use of AI, there is ongoing interest in developing more effective detection methods.\nCurrent Methods of Financial Fraud Detection\nTraditional fraud detection methods often rely on audits, which can be labor intensive and may struggle to differentiate between genuine business success and manipulated figures. These hurdles means that many firms may go unchecked for extended periods.\nPaul Wnek, founder, CEO and principal solutions architect at ExpandAP, told PYMMTS there are many common types of fraud in businesses: \u201cInvoice fraud, such as fictitious invoices for goods or services that were never delivered or legitimate invoices that are altered to divert funds. Vendor fraud, such as setting up fake vendors to receive payments for nonexistent goods or services or kickbacks to award vendors or employees for approving contracts or invoices. Payment fraud, which can occur when fraudsters gain access to payment systems or manipulate approval processes to authorize payments fraudulently.\u201d\nThese schemes can be challenging to detect using conventional methods.\n\u201cWhat is needed is an effective and accurate algorithm to automatically identify accounting fraud, and leave the days of random auditing behind,\u201d said Mengqin Wang, another researcher involved in the FraudGCN project, according to the release.\nFraudGCN attempts to address this by constructing multi-relational graphs representing company connections. This allows the system to analyze patterns across corporate networks.\nWhen tested on data from Chinese listed companies, the researchers found that FraudGCN outperformed current approaches by a margin of 3.15% to 3.86%.\nHowever, the practical implications of these improvements in fraud detection are still unclear.\nThe Role of AI in Fraud Detection and Perpetration\nAs AI\u2019s role in fraud detection expands, experts note its potential for both detecting and aiding fraud. Joe Stephenson, director of digital intelligence at Intertel, discusses AI\u2019s dual nature in this context.\n\u201cIn the insurance industry, we are in the business of selling, and because of this, often overlook potential implications emerging technologies like artificial intelligence may have on claims,\u201d Stephenson told PYMNTS. \u201cWhile AI is great for underwriting, we are also seeing criminals leverage ChatGPT and AI to advance fraudulent activity, whether it be through the development of synthetic IDs or metadata.\u201d\nThis introduces new challenges, as Stephenson explained: \u201cMetadata isn\u2019t traditional, and the use of social media makes it easy for any person to exaggerate claims or organize criminal groups.\u201d\nHowever, AI can also be leveraged to parse through large volumes of data.\n\u201cAdvanced algorithms can scan and analyze social media activity, identifying patterns and anomalies that might go unnoticed by human investigators,\u201d Stephenson said.\nThe \u201cFinancial Fraud Prevention Playbook\u201d by PYMNTS examines how financial institutions can leverage advanced technologies like behavioral analytics and machine learning to combat digital-age fraud tactics, including AI-powered schemes, malicious bots and synthetic identities that evade traditional security measures.\nAutomation in Fraud Prevention\nAlongside AI detection tools, the industry also implements automation in financial processes as a preventive measure.\n\u201cAutomated accounting systems built with best practice security measures offer built-in fraud detection capabilities, such as anomaly detection and invoice matching algorithms,\u201d Wnek said. \u201cThe best platforms are one-stop shops for all AP tasks, leading to a decrease in the number of systems between which data needs to pass through.\u201d\nThis shift toward automation is an ongoing trend in the finance industry.\n\u201cThough traditionally change-averse, accounting teams have started to recognize the value of automation in improving the efficiency and accuracy of processes like accounts payable (AP) and accounts receivable (AR),\u201d Wnek said. \u201cAP automation cuts that line item completely, reducing costs anywhere from 40-95%.\u201d\nAdditionally, by reducing manual interventions in financial processes, automation may decrease opportunities for certain types of fraud.\nHowever, the adoption of these technologies has its challenges.\n\u201cThe two biggest barriers to digitizing AP and AR adoption are cost and complexity,\u201d Wnek said. \u201cBut these barriers are easily alleviated when businesses consider the return on their investment compared to outsourcing customer support and finance processing.\u201d\nThe post New AI System Aims to Detect Financial Fraud Across Corporate Networks appeared first on PYMNTS.com.", "date_published": "2024-09-06T15:39:55-04:00", "date_modified": "2024-09-06T15:39:55-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2024/09/FraudGCN-fraud-detection-AI.jpg", "tags": [ "accounts payable", "accounts receivable", "AI", "artificial intelligence", "Financial Crime", "fraud", "fraud detection", "Fraud Prevention", "FraudGCN", "Joe Stephenson", "News", "Paul Wnek", "PYMNTS News" ] }, { "id": "https://www.pymnts.com/?p=2079159", "url": "https://www.pymnts.com/fraud-prevention/2024/cfit-teams-with-tech-banking-giants-to-fight-financial-crime/", "title": "AWS and Mastercard Lead Industry Coalition to Fight Economic Crime", "content_html": "The Centre for Finance, Innovation and Technology (CFIT) has formed an anti-financial crime group.
\nThe U.K.-based group announced the effort Monday (Sept. 2), noting it had recruited several tech and finance giants to its cause, including Amazon Web Services, Mastercard, Lloyds Bank, Revolut and Santander.
\nAlso joining the group are regulators such as the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR), with the goal of finding new ways to protect businesses and consumers from fraud.
\n\u201cDigital verification is considered a key step in mitigating economic crime,\u201d CFIT said in a news release provided to PYMNTS. \u201cAn enhanced digital identity for businesses that can be shared and understood across institutions and sectors would help thwart fraudsters and create a more secure economy.\u201d
\nThe group aims to offer standardized, verified information about a business \u201cthat is interoperable with other financial systems for data cross-referencing, enhanced authenticity checks and additional fraud detection tools,\u201d the release added.\u00a0
\nMeanwhile, Lloyds Bank, NatWest Bank and Monzo will work together on a proof of concept that tests the impact of a digital corporate ID, \u201cincluding a reduced scope for accounts to be offered to potential criminals,\u201d CFIT said. A report with recommendations on how British institutions could implement a digital verification solution is expected in March of next year.
\nIn other fraud prevention news, PYMNTS spoke recently with Max Spivakovsky, senior director of strategy and operations, global payments risk management and onboarding at Galileo, about the tightrope banks walk as they provide digital services and payments choices to their end customers while protecting against scammers and cybercriminals.
\nHe said this balancing act requires financial institutions (FIs) to take both proactive and reactive approaches, while also employing technological tools, as they defend themselves while creating a personalized, convenient customer experience.
\n\u201cThe legacy solutions just don\u2019t work anymore,\u201d he told PYMNTS. \u201cLeveraging a single tool used to be the \u2018paramount\u2019 strategy of fraud mitigation years ago, but now it\u2019s just not applicable. \u2026 The FIs must think about fighting fraud with a holistic perspective.\u201d
\nThe holistic approach can pay dividends while protecting banks from financial losses and harm to their reputation, he said.
\n\u201cThe client experience drives the engagement, and utilization of [banking] apps and programs,\u201d Spivakovsky added.
\nThe post AWS and Mastercard Lead Industry Coalition to Fight Economic Crime appeared first on PYMNTS.com.
\n", "content_text": "The Centre for Finance, Innovation and Technology (CFIT) has formed an anti-financial crime group.\nThe U.K.-based group announced the effort Monday (Sept. 2), noting it had recruited several tech and finance giants to its cause, including Amazon Web Services, Mastercard, Lloyds Bank, Revolut and Santander.\nAlso joining the group are regulators such as the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR), with the goal of finding new ways to protect businesses and consumers from fraud.\n\u201cDigital verification is considered a key step in mitigating economic crime,\u201d CFIT said in a news release provided to PYMNTS. \u201cAn enhanced digital identity for businesses that can be shared and understood across institutions and sectors would help thwart fraudsters and create a more secure economy.\u201d\nThe group aims to offer standardized, verified information about a business \u201cthat is interoperable with other financial systems for data cross-referencing, enhanced authenticity checks and additional fraud detection tools,\u201d the release added.\u00a0\nMeanwhile, Lloyds Bank, NatWest Bank and Monzo will work together on a proof of concept that tests the impact of a digital corporate ID, \u201cincluding a reduced scope for accounts to be offered to potential criminals,\u201d CFIT said. A report with recommendations on how British institutions could implement a digital verification solution is expected in March of next year.\nIn other fraud prevention news, PYMNTS spoke recently with Max Spivakovsky, senior director of strategy and operations, global payments risk management and onboarding at Galileo, about the tightrope banks walk as they provide digital services and payments choices to their end customers while protecting against scammers and cybercriminals.\nHe said this balancing act requires financial institutions (FIs) to take both proactive and reactive approaches, while also employing technological tools, as they defend themselves while creating a personalized, convenient customer experience.\n\u201cThe legacy solutions just don\u2019t work anymore,\u201d he told PYMNTS. \u201cLeveraging a single tool used to be the \u2018paramount\u2019 strategy of fraud mitigation years ago, but now it\u2019s just not applicable. \u2026 The FIs must think about fighting fraud with a holistic perspective.\u201d\nThe holistic approach can pay dividends while protecting banks from financial losses and harm to their reputation, he said.\n\u201cThe client experience drives the engagement, and utilization of [banking] apps and programs,\u201d Spivakovsky added.\nThe post AWS and Mastercard Lead Industry Coalition to Fight Economic Crime appeared first on PYMNTS.com.", "date_published": "2024-09-02T19:03:07-04:00", "date_modified": "2024-09-02T21:50:52-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2024/09/CFIT-ID-verification.jpg", "tags": [ "Amazon Web Services", "anti-fraud", "anti-fraud technology", "bank fraud", "Centre for Finance Innovation and Technology", "CFIT", "fraud", "fraud detection", "Fraud Prevention", "ID verification", "identity", "lloyds bank", "MasterCard", "News", "PYMNTS News", "Revolut", "Santande", "What's Hot" ] }, { "id": "https://www.pymnts.com/?p=2054807", "url": "https://www.pymnts.com/fraud-prevention/2024/account-onboarding-gets-its-ai-makeover/", "title": "Account Onboarding Gets Its AI Makeover", "content_html": "Here\u2019s the thing about fraud: You don\u2019t want to have to calculate the ROI of fraud when it\u2019s too late. Because the flip side can be treacherous. Unfortunately, the prevailing mindset of banks and other companies may be that they don\u2019t have the resources to invest into those anti-fraud efforts unless they\u2019ve been under attack.
\nGarrett Laird, director of product management at Amount, a digital origination and decisioning SaaS platform powering consumer and small business deposit account opening and loan origination, told PYMNTS that many financial institutions (FIs) don\u2019t reconsider their anti-fraud methods until it\u2019s too late.
\n\u201cYou may not have realized it yet,\u201d Laird said, \u201cbut they\u2019re going to hit you.\u201d And, he observed, \u201cthe fraudsters are jerks \u2014 and they like to hit you on holidays and on weekends, at two in the morning.\u201d
\nThe conversation was part of the \u201cWhat\u2019s Next in Payments\u201d series focused on protecting the perimeter of various organizations from cyberattacks and hacks \u2014 keeping fraudsters out while letting good customers in and letting them transact with ease and speed.
\nWorking with banks and credit unions, and helping them originate credit products digitally, said Laird, means that decisioning, pricing, fraud and verification are all key \u2014 and simultaneous \u2014 considerations that must be handled in real time. For a bank, when a new application shows up, and someone\u2019s opening a new deposit account or applying for a loan or credit card, well, if a fraudster does manage to get through, the impact can be serious.
\nA single account, he said, can act as a \u201cgap\u201d or a \u201cloophole that enables a broader group of criminals to take advantage \u2014 and fraudsters are notorious for looking for banks\u2019 \u201csoft spots.\u201d Thus, a single application gives way to waves of hundreds of other applications all seeking to provide an entry point for a scam or breach.
\n\u201cWe\u2019ve been direct lenders ourselves,\u201d he said, in speaking about his platform\u2019s functionalities, \u201cand we have built technology that we ourselves have used, and we feel confident about giving to other financial institutions and helping them launch new products.\u201d
\nA tech-enabled onboarding experience, said Laird, underpinned by artificial intelligence (AI) and machine learning, can not only beef up security but also foster a good customer reaction so that legitimate relationships prove sticky and long-lived.
\n\u201cIt all leads to better conversions when you keep your customers happy,\u201d said Laird, rather than losing that same would-be customer to the FI that offers a relatively better user experience.
\nHe noted there are several data sources that can be used to glean insights into emails, password, linked bank accounts and uploaded documents all in the service of identity verification.
\n\u201cThere\u2019s a waterfall that we can put applicants through,\u201d he said. \u201cSuppose we\u2019ve just discovered a fraud ring and they\u2019re really good at forging documents and they\u2019re beating some [of an FI\u2019s] controls. \u201cWe can put an extra layer of friction in their way,\u201d he said, \u201cescalating to manual review queues so the fraud operations teams can put \u2018eyes\u2019 on how that fraud ring is evolving \u2026 and not getting in the front door in the first place.\u201d AI, he said, helps with third-party fraud models to help detect fraudulent applications, representing another tool in the (rules-driven) anti-fraud toolbox.
\n\u201cWe\u2019ve sought to be proactive about having the right data and processes in place to make decisions in an intelligent way,\u201d he said, adding that \u201cit\u2019s not just about keeping out the \u2018bad,\u2019 it\u2019s about letting the \u2018good\u2019 in and making things as painless as possible for them.\u201d
\nThe post Account Onboarding Gets Its AI Makeover appeared first on PYMNTS.com.
\n", "content_text": "Here\u2019s the thing about fraud: You don\u2019t want to have to calculate the ROI of fraud when it\u2019s too late. Because the flip side can be treacherous. Unfortunately, the prevailing mindset of banks and other companies may be that they don\u2019t have the resources to invest into those anti-fraud efforts unless they\u2019ve been under attack.\nGarrett Laird, director of product management at Amount, a digital origination and decisioning SaaS platform powering consumer and small business deposit account opening and loan origination, told PYMNTS that many financial institutions (FIs) don\u2019t reconsider their anti-fraud methods until it\u2019s too late.\n\u201cYou may not have realized it yet,\u201d Laird said, \u201cbut they\u2019re going to hit you.\u201d And, he observed, \u201cthe fraudsters are jerks \u2014 and they like to hit you on holidays and on weekends, at two in the morning.\u201d\nThe conversation was part of the \u201cWhat\u2019s Next in Payments\u201d series focused on protecting the perimeter of various organizations from cyberattacks and hacks \u2014 keeping fraudsters out while letting good customers in and letting them transact with ease and speed.\nWorking with banks and credit unions, and helping them originate credit products digitally, said Laird, means that decisioning, pricing, fraud and verification are all key \u2014 and simultaneous \u2014 considerations that must be handled in real time. For a bank, when a new application shows up, and someone\u2019s opening a new deposit account or applying for a loan or credit card, well, if a fraudster does manage to get through, the impact can be serious.\nA single account, he said, can act as a \u201cgap\u201d or a \u201cloophole that enables a broader group of criminals to take advantage \u2014 and fraudsters are notorious for looking for banks\u2019 \u201csoft spots.\u201d Thus, a single application gives way to waves of hundreds of other applications all seeking to provide an entry point for a scam or breach.\n\u201cWe\u2019ve been direct lenders ourselves,\u201d he said, in speaking about his platform\u2019s functionalities, \u201cand we have built technology that we ourselves have used, and we feel confident about giving to other financial institutions and helping them launch new products.\u201d\nTech-Enabled Onboarding \nA tech-enabled onboarding experience, said Laird, underpinned by artificial intelligence (AI) and machine learning, can not only beef up security but also foster a good customer reaction so that legitimate relationships prove sticky and long-lived.\n\u201cIt all leads to better conversions when you keep your customers happy,\u201d said Laird, rather than losing that same would-be customer to the FI that offers a relatively better user experience.\nHe noted there are several data sources that can be used to glean insights into emails, password, linked bank accounts and uploaded documents all in the service of identity verification.\n\u201cThere\u2019s a waterfall that we can put applicants through,\u201d he said. \u201cSuppose we\u2019ve just discovered a fraud ring and they\u2019re really good at forging documents and they\u2019re beating some [of an FI\u2019s] controls. \u201cWe can put an extra layer of friction in their way,\u201d he said, \u201cescalating to manual review queues so the fraud operations teams can put \u2018eyes\u2019 on how that fraud ring is evolving \u2026 and not getting in the front door in the first place.\u201d AI, he said, helps with third-party fraud models to help detect fraudulent applications, representing another tool in the (rules-driven) anti-fraud toolbox.\n\u201cWe\u2019ve sought to be proactive about having the right data and processes in place to make decisions in an intelligent way,\u201d he said, adding that \u201cit\u2019s not just about keeping out the \u2018bad,\u2019 it\u2019s about letting the \u2018good\u2019 in and making things as painless as possible for them.\u201d\nThe post Account Onboarding Gets Its AI Makeover appeared first on PYMNTS.com.", "date_published": "2024-08-20T04:03:52-04:00", "date_modified": "2024-08-19T22:33:29-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2024/08/Onboarding-overlay.jpg", "tags": [ "AI", "Amount", "artificial intelligence", "banking", "Banks", "Featured News", "fraud", "Fraud Prevention", "Garrett Laird", "identity verification", "loan origination", "loans", "machine learning", "News", "PYMNTS News", "pymnts tv", "SaaS", "software", "Technology", "WhatsNextInPaymentsSeries", "What\u2019s Next In Payments: Protecting The Perimeter 2024" ] }, { "id": "https://www.pymnts.com/?p=2050280", "url": "https://www.pymnts.com/fraud-prevention/2024/77-of-consumers-expect-banks-to-use-ai-to-fight-fraud/", "title": "77% of Consumers Expect Banks to Use AI to Fight Fraud", "content_html": "Real-time payments, known for their speed and immediacy, have faced adoption hurdles primarily due to perceptions about security. As financial institutions (FIs) and payments providers grapple with balancing rapid transaction processing with stringent security measures, artificial intelligence (AI) emerges as a crucial tool in overcoming these obstacles.
\nA recent PYMNTS Intelligence report, \u201cInstant Impact: AI\u2019s Role in Advancing Real-Time Payments,\u201d in collaboration with The Clearing House, explores the evolving landscape of real-time payments and the critical role of AI in addressing associated challenges. It explores how AI technologies are integrated to streamline fraud detection, enhance customer experiences and accelerate the broader acceptance of real-time payment systems.\u00a0
\nReal-time payments offer significant benefits, such as instant transaction completion and user authorization, but their adoption is impeded by perceived security risks. One concern is a heightened vulnerability to fraud, given the immediacy and irreversibility of these transactions.
\nAccording to a recent survey, 44% of organizations list increased fraud risk as a major obstacle, just behind system development issues. Manual anti-money laundering (AML) checks exacerbate this challenge, with 75% of financial institutions relying on outdated, labor-intensive processes. This reliance contributes to delays and perceived risks. There is growing recognition, however, that integrating AI could alleviate these issues, making real-time payments more secure and efficient.
\nBalancing rapid transaction processing with effective security is a significant challenge for payments providers, but AI is emerging as a key solution in this area. By automating identity verification and fraud detection, AI can reduce onboarding times, from more than 11 minutes to less than 8 minutes by 2028, translating to a 30% reduction. This efficiency not only improves customer satisfaction but enhances security by detecting fraudulent activities more accurately.
\nAI-powered algorithms analyze transaction patterns, identify anomalies and reduce false positives, leading to more accurate fraud detection and a smoother customer experience. PYMNTS Intelligence found that FIs are optimistic about AI\u2019s role in managing these trade-offs effectively.\u00a0
\nFIs are increasingly turning to AI to enhance their fraud detection capabilities. The adoption of AI and machine learning (ML) technologies is transforming how transactions are monitored and secured. A significant 94% of payments professionals view AI primarily as a tool for improving fraud detection. AI\u2019s predictive analytics capabilities help identify potential fraud by analyzing user behavior patterns and transaction anomalies.\u00a0
\nBeyond fraud detection, AI is used for personalized customer service and operational efficiencies. A 2023 FICO survey found that 77% of customers expect FIs to leverage AI for better fraud prevention, underscoring the growing demand for advanced security measures. AI\u2019s ability to provide real-time alerts about suspicious activities further underscores its critical role in the future of secure and efficient payments.
\nAI is transforming real-time payments by improving transaction speed and accuracy while addressing security and fraud concerns. This advancement paves the way for wider adoption of real-time payment systems. As AI technology evolves, it promises to further enhance both the efficiency and safety of financial transactions.\u00a0
\nThe post 77% of Consumers Expect Banks to Use AI to Fight Fraud appeared first on PYMNTS.com.
\n", "content_text": "Real-time payments, known for their speed and immediacy, have faced adoption hurdles primarily due to perceptions about security. As financial institutions (FIs) and payments providers grapple with balancing rapid transaction processing with stringent security measures, artificial intelligence (AI) emerges as a crucial tool in overcoming these obstacles.\nA recent PYMNTS Intelligence report, \u201cInstant Impact: AI\u2019s Role in Advancing Real-Time Payments,\u201d in collaboration with The Clearing House, explores the evolving landscape of real-time payments and the critical role of AI in addressing associated challenges. It explores how AI technologies are integrated to streamline fraud detection, enhance customer experiences and accelerate the broader acceptance of real-time payment systems.\u00a0\nReal-Time Payments Face Challenges\nReal-time payments offer significant benefits, such as instant transaction completion and user authorization, but their adoption is impeded by perceived security risks. One concern is a heightened vulnerability to fraud, given the immediacy and irreversibility of these transactions. \nAccording to a recent survey, 44% of organizations list increased fraud risk as a major obstacle, just behind system development issues. Manual anti-money laundering (AML) checks exacerbate this challenge, with 75% of financial institutions relying on outdated, labor-intensive processes. This reliance contributes to delays and perceived risks. There is growing recognition, however, that integrating AI could alleviate these issues, making real-time payments more secure and efficient.\nAI Balances Speed and Security in Payments\nBalancing rapid transaction processing with effective security is a significant challenge for payments providers, but AI is emerging as a key solution in this area. By automating identity verification and fraud detection, AI can reduce onboarding times, from more than 11 minutes to less than 8 minutes by 2028, translating to a 30% reduction. This efficiency not only improves customer satisfaction but enhances security by detecting fraudulent activities more accurately.\nAI-powered algorithms analyze transaction patterns, identify anomalies and reduce false positives, leading to more accurate fraud detection and a smoother customer experience. PYMNTS Intelligence found that FIs are optimistic about AI\u2019s role in managing these trade-offs effectively.\u00a0\nFIs Adopt AI to Accelerate Fraud Detection\nFIs are increasingly turning to AI to enhance their fraud detection capabilities. The adoption of AI and machine learning (ML) technologies is transforming how transactions are monitored and secured. A significant 94% of payments professionals view AI primarily as a tool for improving fraud detection. AI\u2019s predictive analytics capabilities help identify potential fraud by analyzing user behavior patterns and transaction anomalies.\u00a0\nBeyond fraud detection, AI is used for personalized customer service and operational efficiencies. A 2023 FICO survey found that 77% of customers expect FIs to leverage AI for better fraud prevention, underscoring the growing demand for advanced security measures. AI\u2019s ability to provide real-time alerts about suspicious activities further underscores its critical role in the future of secure and efficient payments.\nAI is transforming real-time payments by improving transaction speed and accuracy while addressing security and fraud concerns. This advancement paves the way for wider adoption of real-time payment systems. As AI technology evolves, it promises to further enhance both the efficiency and safety of financial transactions.\u00a0\nThe post 77% of Consumers Expect Banks to Use AI to Fight Fraud appeared first on PYMNTS.com.", "date_published": "2024-08-12T04:00:54-04:00", "date_modified": "2024-08-11T20:51:32-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2024/08/AI-fraud-detection-fraud-prevention.jpg", "tags": [ "AI", "artificial intelligence", "Featured News", "financial institutions", "fraud", "fraud detection", "Fraud Prevention", "Instant Impact: AI\u2019s Role in Advancing Real-Time Payments", "News", "PYMNTS Intelligence", "PYMNTS News" ] }, { "id": "https://www.pymnts.com/?p=2038610", "url": "https://www.pymnts.com/fraud-prevention/2024/report-cfpb-investigation-of-zelle-expected-to-include-more-banks/", "title": "Report: CFPB Probe of Zelle Expected to Include BofA and Wells Fargo", "content_html": "The\u00a0Consumer Financial Protection Bureau (CFPB) is reportedly looking\u00a0into how some of the biggest U.S. banks handle complaints from customers who dispute transactions made through\u00a0Zelle.
\nJPMorgan Chase disclosed the CFPB\u2019s investigation of the\u00a0peer-to-peer (P2P) payment app on Friday (Aug. 2) in a\u00a0filing with the\u00a0Securities and Exchange Commission (SEC), and other large banks are expected to make similar disclosures soon, the Wall Street Journal (WSJ)\u00a0reported Wednesday (Aug. 7), citing unnamed sources
\nThe CFPB\u2019s probe is focusing on whether banks are doing enough to verify the identity and background of deposit-account customers and to shut down accounts controlled by scammers, according to the report.
\nIn JPMorgan Chase\u2019s filing, the bank said that it is responding to inquiries from the CFPB, regarding transfers of funds through Zelle.
\n\u201cIn connection with this, the CFPB Staff has informed the Firm that it is authorized to pursue a resolution of the inquiries or file an enforcement action,\u201d the filing said. \u201cThe Firm is evaluating next steps, including litigation.\u201d
\nWells Fargo had previously disclosed that \u201cgovernment authorities\u201d are asking about Zelle, according to the WSJ report.
\nZelle is owned by a consortium of seven banks \u2014 including JPMorgan Chase, Wells Fargo and\u00a0Bank of America \u2014 and is run by network operator\u00a0Early Warning, per the report.
\nEarly Warning told the WSJ that it has put countermeasures in place and that 99.5% of Zelle transactions are completed without reports of fraud.
\nOn Monday (Aug. 5), Senator\u00a0Richard Blumenthal, D-Conn., issued a\u00a0press release and the text of a\u00a0letter to CFPB Director\u00a0Rohit Chopra in which Blumenthal called on the regulator to investigate the dispute resolution practices of Early Warning and the three banks that collectively represent 73% of all Zelle transactions: JPMorgan Chase, Bank of America\u00a0and Wells Fargo.
\n\u201cI further urge you to take appropriate action to ensure that these institutions fully and promptly address consumer reports of fraud, as required by law,\u201d Blumenthal said in his letter to Chopra. \u201cIf your investigation finds that an institution has violated the Electronic Fund Transfer Act \u2018knowingly and willfully,\u2019 I encourage you to take the strongest appropriate action.\u201d
\nFifty-one percent of Americans use\u00a0P2P apps like Zelle and\u00a0Venmo for quick and easy money transfers, but concerns about fraud are casting a shadow over the growth of these services, according to the PYMNTS Intelligence and\u00a0The Clearing House collaboration, \u201cP2P Payment Potential: Promoting Convenience While Protecting Consumers.\u201d
\nThe post Report: CFPB Probe of Zelle Expected to Include BofA and Wells Fargo appeared first on PYMNTS.com.
\n", "content_text": "The\u00a0Consumer Financial Protection Bureau (CFPB) is reportedly looking\u00a0into how some of the biggest U.S. banks handle complaints from customers who dispute transactions made through\u00a0Zelle.\nJPMorgan Chase disclosed the CFPB\u2019s investigation of the\u00a0peer-to-peer (P2P) payment app on Friday (Aug. 2) in a\u00a0filing with the\u00a0Securities and Exchange Commission (SEC), and other large banks are expected to make similar disclosures soon, the Wall Street Journal (WSJ)\u00a0reported Wednesday (Aug. 7), citing unnamed sources\nThe CFPB\u2019s probe is focusing on whether banks are doing enough to verify the identity and background of deposit-account customers and to shut down accounts controlled by scammers, according to the report.\nIn JPMorgan Chase\u2019s filing, the bank said that it is responding to inquiries from the CFPB, regarding transfers of funds through Zelle.\n\u201cIn connection with this, the CFPB Staff has informed the Firm that it is authorized to pursue a resolution of the inquiries or file an enforcement action,\u201d the filing said. \u201cThe Firm is evaluating next steps, including litigation.\u201d\nWells Fargo had previously disclosed that \u201cgovernment authorities\u201d are asking about Zelle, according to the WSJ report.\nZelle is owned by a consortium of seven banks \u2014 including JPMorgan Chase, Wells Fargo and\u00a0Bank of America \u2014 and is run by network operator\u00a0Early Warning, per the report.\nEarly Warning told the WSJ that it has put countermeasures in place and that 99.5% of Zelle transactions are completed without reports of fraud.\nOn Monday (Aug. 5), Senator\u00a0Richard Blumenthal, D-Conn., issued a\u00a0press release and the text of a\u00a0letter to CFPB Director\u00a0Rohit Chopra in which Blumenthal called on the regulator to investigate the dispute resolution practices of Early Warning and the three banks that collectively represent 73% of all Zelle transactions: JPMorgan Chase, Bank of America\u00a0and Wells Fargo.\n\u201cI further urge you to take appropriate action to ensure that these institutions fully and promptly address consumer reports of fraud, as required by law,\u201d Blumenthal said in his letter to Chopra. \u201cIf your investigation finds that an institution has violated the Electronic Fund Transfer Act \u2018knowingly and willfully,\u2019 I encourage you to take the strongest appropriate action.\u201d\nFifty-one percent of Americans use\u00a0P2P apps like Zelle and\u00a0Venmo for quick and easy money transfers, but concerns about fraud are casting a shadow over the growth of these services, according to the PYMNTS Intelligence and\u00a0The Clearing House collaboration, \u201cP2P Payment Potential: Promoting Convenience While Protecting Consumers.\u201d\nThe post Report: CFPB Probe of Zelle Expected to Include BofA and Wells Fargo appeared first on PYMNTS.com.", "date_published": "2024-08-07T12:11:00-04:00", "date_modified": "2024-08-07T21:28:46-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2023/11/Zelle.jpg", "tags": [ "CFPB", "Consumer Finance Protection Bureau", "fraud", "Fraud Prevention", "instant payments", "News", "P2P", "P2P payments", "Payment Methods", "PYMNTS News", "real time payments", "What's Hot", "Zelle" ] }, { "id": "https://www.pymnts.com/?p=2015239", "url": "https://www.pymnts.com/fraud-prevention/2024/featurespace-and-orbograph-team-to-combat-check-fraud/", "title": "Featurespace and OrboGraph Team to Combat Check Fraud", "content_html": "Financial crime prevention firm Featurespace has launched a partnership with fraud detection software maker OrboGraph.
\nThe collaboration, announced Tuesday (July 23), is aimed at protecting financial services companies from check fraud.
\n\u201cCheck fraud is a growing and concerning area of financial crime \u2014 we know banks and financial institutions are experiencing a rise in reports and are in need of more advanced tools that can tackle the issue,\u201d Barry Cohen, CEO of OrboGraph, said in a news release.
\n\u201cCombining our expertise with Featurespace will enable us to deliver a more robust and comprehensive fraud detection solution, helping financial institutions to stay ahead of increasingly sophisticated check fraud schemes,\u201d Cohen added.
\nAccording to the release, the partnership will involve Featurespace and OrboGraph integrating their fraud-detection services to better identify and prevent fraudulent check activities.
\n\u201cBy bringing together the two technology platforms, financial institutions will be empowered with a single solution that will enhance detection of fraudulent checks and reduce false positives, thereby improving operational efficiency and customer experience,\u201d the release said.
\nThe release pointed to data from the Financial Crimes Enforcement Network showing that check fraud is becoming more prevalent compared to other types of fraud, accounting for more than a third of all fraud at depository institutions last year.
\nAnd as reported here in March, The Federal Reserve Bank of Boston has estimated that there had been 680,000 reports on check fraud in 2022, almost double what they reported in 2021 \u2014 with losses in 2023 estimated to come to around $23 billion.
\n\u201cThe criminals also take advantage of \u2018float,\u2019 the days between when a check is accepted at a bank or business and when funds are withdrawn from the checking account. By the time the fraudulent check is detected by the account holder, the thieves are often long gone,\u201d the Fed said in a blog post.
\nAmong the solutions recommended by the Fed: \u201cWhenever possible, switch to secure electronic payment methods.\u201d
\nMeanwhile, PYMNTS spoke earlier this with Featurespace founder Dave Excell, who warned of the increasing prevalence of scams as scammers discover new tools.
\n\u201cUnfortunately, the amount of scams and the prevalence of them has continued to increase, as there are new tools available to scammers \u2026 to victimize vulnerable populations,\u201d he told Karen Webster as part of the \u201cWhat\u2019s Next In Payments\u201d series.
\nAmong the new threats is the rise of job-related scams, which have jumped 118% year over year, according to data from the Identity Theft Resource Center. These scams often prey on job hunters by pretending to be legitimate employment agencies or recruiters.
\nThe post Featurespace and OrboGraph Team to Combat Check Fraud appeared first on PYMNTS.com.
\n", "content_text": "Financial crime prevention firm Featurespace has launched a partnership with fraud detection software maker OrboGraph.\nThe collaboration, announced Tuesday (July 23), is aimed at protecting financial services companies from check fraud.\n\u201cCheck fraud is a growing and concerning area of financial crime \u2014 we know banks and financial institutions are experiencing a rise in reports and are in need of more advanced tools that can tackle the issue,\u201d Barry Cohen, CEO of OrboGraph, said in a news release.\n\u201cCombining our expertise with Featurespace will enable us to deliver a more robust and comprehensive fraud detection solution, helping financial institutions to stay ahead of increasingly sophisticated check fraud schemes,\u201d Cohen added.\nAccording to the release, the partnership will involve Featurespace and OrboGraph integrating their fraud-detection services to better identify and prevent fraudulent check activities.\n\u201cBy bringing together the two technology platforms, financial institutions will be empowered with a single solution that will enhance detection of fraudulent checks and reduce false positives, thereby improving operational efficiency and customer experience,\u201d the release said.\nThe release pointed to data from the Financial Crimes Enforcement Network showing that check fraud is becoming more prevalent compared to other types of fraud, accounting for more than a third of all fraud at depository institutions last year.\nAnd as reported here in March, The Federal Reserve Bank of Boston has estimated that there had been 680,000 reports on check fraud in 2022, almost double what they reported in 2021 \u2014 with losses in 2023 estimated to come to around $23 billion.\n\u201cThe criminals also take advantage of \u2018float,\u2019 the days between when a check is accepted at a bank or business and when funds are withdrawn from the checking account. By the time the fraudulent check is detected by the account holder, the thieves are often long gone,\u201d the Fed said in a blog post.\nAmong the solutions recommended by the Fed: \u201cWhenever possible, switch to secure electronic payment methods.\u201d\nMeanwhile, PYMNTS spoke earlier this with Featurespace founder Dave Excell, who warned of the increasing prevalence of scams as scammers discover new tools.\n\u201cUnfortunately, the amount of scams and the prevalence of them has continued to increase, as there are new tools available to scammers \u2026 to victimize vulnerable populations,\u201d he told Karen Webster as part of the \u201cWhat\u2019s Next In Payments\u201d series.\nAmong the new threats is the rise of job-related scams, which have jumped 118% year over year, according to data from the Identity Theft Resource Center. These scams often prey on job hunters by pretending to be legitimate employment agencies or recruiters.\nThe post Featurespace and OrboGraph Team to Combat Check Fraud appeared first on PYMNTS.com.", "date_published": "2024-07-23T12:47:49-04:00", "date_modified": "2024-07-23T12:47:49-04:00", "authors": [ { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" } ], "author": { "name": "PYMNTS", "url": "https://www.pymnts.com/author/pymnts/", "avatar": "https://secure.gravatar.com/avatar/f05cc0fdcc9e387e4f3570c17158c503?s=512&d=blank&r=g" }, "image": "https://www.pymnts.com/wp-content/uploads/2024/07/OrboGraph-Featurespace-Check-fraud.jpg", "tags": [ "check fraud", "Featurespace", "Financial Crime", "fraud", "Fraud Prevention", "News", "orbograph", "partnerships", "PYMNTS News", "scams", "Security", "What's Hot" ] } ] }