New threats continue to occur as fraudsters evolve their strategies. Hacking, phishing, skimming, and stolen identities are topics of concern for fraud and risk executives at financial institutions (FIs). As the sophistication of fraudulent activity increases, so does the requirement for FIs to enhance their methods for managing fraud. Collaboration is essential to quickly identify and prevent fraud to mitigate losses, provide positive customer interactions, and manage the FI’s reputation.
Flexibility is Key
Because fraudsters often behave just like a bank’s most profitable customers, the key is determining if the consumer is who they say they are with accuracy and in realtime. Zoot’s fraud engine helps banks to do this in account opening and transaction authorization processes. Business users are able to define unique logic to determine if an interaction with the bank is fraudulent using sophisticated tools to create and test many different fraud prevention strategies. FIs can adjust their tactics as frequently as necessary, from multiple times a day to once a quarter. Alternative data sources and FIs’ own internal relationship data can be integrated into the fraud prevention process for a more comprehensive view of the consumer to avoid false positives.
The Right Data for the Right Type of Fraud
It is important to first understand what type of potential fraud might be occurring to keep data costs down, pulling only the data necessary to validate if an interaction is fraudulent. For example, in the case of an online application, a device matching data provider might be pulled to validate the IP address, while a call center might focus on mailing address verification. If there is an indication of fraud, a bureau file will not be pulled, saving the cost of that data in addition to the losses that could have resulted from booking a fraudulent account.
The Future of Fraud Evaluation
Financial institutions must adapt quickly to new fraud tactics. By leveraging robust business rules development tools and Zoot’s expertise in data integration, FIs can achieve more sophisticated fraud identification and prevention during account opening and transaction authorization.