The risk of fraud and other financial crimes has increased dramatically as consumers take advantage of e-commerce, digital banking and online payment applications. Every new portal and mobile app expands the attack surface and gives hackers new opportunities to exploit vulnerabilities. The burden on financial institutions is also increasing. According to McKinsey, U.S. fraud losses will reach $5.9 billion in 2021, a 436% increase from 2017 levels. And for every dollar lost in fraud, the bank spends his $4 or more in recovery costs, attorney fees, and other costs.
Stopping financial crime is never easy, but by adopting the right cloud infrastructure and strategically deploying artificial intelligence (AI) technology, financial institutions can stay ahead of bad actors and keep them out of trouble. Gain insight into their tactics so you can spot their activity sooner and stop attacks before they lead the way. to a loss.
Fraud risk management challenges
Fraud is a high value business for today’s online criminals. They troll the internet and inject data-stealing malware into vulnerable sites and mobile apps. They sell their stolen data on the dark web and form alliances to trade tactics and technologies such as AI algorithms that can crack even the most complex passwords in seconds. They buy thousands of illegal debit and credit card numbers and combine them with other hacked information (such as social security numbers of children with no financial history) to create fake identities and multiple open a fraudulent account with
To counter these measures, financial institutions are taking increasingly aggressive steps to quickly identify suspicious activity and transactions.
Archana Trikha, Associate General Manager, Tata Consultancy Services (TCS) said: “Mature banks do a lot of transactions, but less than 1% are fraudulent, so you’re basically finding a needle in the haystack. Card and ATM transactions. is taking place, we need to identify suspicious activity and take decisive action in milliseconds.”
Traditional tables and relational databases on the back end of financial systems and applications are often siled. Missing important correlations may prevent analysts and automated systems from spotting illegal activity early enough to prevent losses. When suspicious activity is flagged, it can stall transactions and frustrate customers while agents investigate the issue.
Fight back with AI
“For effective fraud prevention, financial institutions must incorporate AI technology and multiple dimensions related to the sequence of events to stay one step ahead of cybercriminals by identifying suspicious activity in real time. Yes,” says Trikha. One of the key steps is accessing the processing power of the Microsoft Cloud. This enables organizations to integrate and analyze large data sets from multiple data sources and quickly correlate them for possible connections to fraudsters and money laundering shell companies. increase.
For example, organizations use cloud-based AI applications to analyze customer behavior, identify deviations from real customer profiles in near real time, identify anomalous behavior, and identify collusion between entities. You can AI can also enhance existing software, such as alert systems, which often generate many false positives. In addition to reducing alert fatigue, AI capabilities can provide reasoning for decisions, saving staff time creating compliance reports.
“These are just some of the advanced technologies that TCS deploys and customizes for its financial clients,” says Trikha. Once big data and AI systems are set up in the Microsoft Cloud, they will continue to incorporate the latest information on threats, investigations and interventions, helping financial institutions stay ahead of criminals.
learning How to master your cloud transformation journey with TCS and the Microsoft Cloud.
