How to protect frauds and forgeries? The several variety of crimes occur in banking sector today, with parallelly improvements of technology. Fortunately, there are also modern ways to fight with them for banking fraud preventing solutions. Here are five varieties of banking fraud and methods of prevention:
1. The Crime: Wire Fraud
The criminals forged physical banknotes, banks still contend with the essence of their crime. a large sums of money are coming from a reputable source when they are completely fake.
The Solution: Artificial Intelligence
With so many transactions occurring simultaneously, banks cannot look at each individual transaction and verify that each transfer of money. This would create enormous bottlenecks, destroying modern life’s rapid pace and customer expectations for online banking.
2. The Crime: Credential Stealing
It’s a lot easier to pretend to be somebody else when you have the entire internet between you and your target. While doing this, fraudsters use many methods to acquire data that uniquely identifies their users. Data possibilities include social security number, driver’s license number, or birth date.
The Solution: Biometric Data
A strong password is better than a weak password, which is better than no password at all. The strongest passwords deter fraud excellently, but they won’t help much if the criminal convinces a user to share them willingly.
3. The Crime: Account Takeover
How to protect frauds and forgeries? An account takeover is similar to credential stealing, but with more bad news. In the best-case scenario, lost credentials lead to a bank account password reset for the victim. The worst-case scenario for account takeover is plain old identity theft, which puts the whole organization at risk.
The Solution: Consortium Data
The value of a system designed to detect fraud increases as the quality and quantity of the data it accesses increases. Using data pulled from a wide variety of sources increases the diversity of the information, multiplying security and analysis. This data is called consortium data, as it comprises collective intelligence from multiple sources within the same industry or sector.
4. The Crime: Money Laundering
As long as people have been stealing money, or acquiring it illegally, they’ve looked for ways to make the ill-gotten gains look legitimate. “Dirty” money comes from fraudulent activities and crimes of many varieties.
The Solution: High Tech Standardization
It seems simple, but the security of a business’s data increases dramatically when every aspect of the business operates on the same system. This rings particularly true for financial institutions, as many legacy systems create big holes that fraudsters can exploit.
5. The Crime: Accounting Fraud
Accounting fraud primarily affects business lending. Businesses commit accounting fraud by falsifying data about themselves in order to appear more than they actually are. Based on fraudulent bank statements, banks grant loans to these businesses. .
The Solution: Machine Learning
Automation of data gathering and analysis has revolutionized the world of banking. With greater and greater frequency, companies are learning that simple rule-based AIs just aren’t cutting it in banking fraud prevention. In comes machine learning, cybersecurity that updates itself to protect against new threats, a solution Fraud.net offers as part of our product suite.
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