Believe it or not, your bank is among the experts in fraud detection. Many of us have experienced urgent phone calls from the bank when we make a larger-than-normal purchase, and this is a good thing. The bank's systems constantly track customers' card use - amount, locations, day of time, etc. to develop a map of your spending habits - and it's when something wanders out of this map that they alert customers before serious damage can be done. Doing so gives customers a chance to interrupt fraud as it happens, as well as minimizing losses for the bank.
However, as our world transitions to AI and more automation, there's increasing concerns about how to protect customers from bank fraud. Machines will begin to make purchases for us ("Alexa, order more toothpaste...") or even learn to check supplies on hand and automatically order products that are running low. But how do we determine who authorized the machine to make the purchase? In the first case it's fairly cut and dry, however in the second it's not so clear. Devices in our home could even one day listen to our conversations and generate shopping lists in the background, or even anticipate that hot wings should be on hand for Super Bowl Sunday.
Another issue is how much more we're interacting with our banks - while it may seem that the opposite is true consumers have become largely reliant on card and digital payments over cash, and so many transactions are now occurring over home wifi and mobile networks. In other words, it's getting really hard to catch the bad guys with so much banking integration in our lives.
To address this, banks are proactively gearing up and are working to track transactions across all "human-not-present" avenues. In a case study analyzing one such effort, it was found that by tracking how fraudsters were failing call center authentication and then risk-assessing those accounts increased fraud detection rates by 2.2%, which translated to half a million dollars a year in savings for the bank. Other analysis shows that consumers are even handling the same banking interaction on multiple channels (such as a laptop, then phone, then virtual assistant).
By looking at what's happening across all transaction channels and comparing it, banks are showing themselves to be adept and keeping your money safe in an evolving world.
This article was based on an August 13, 2018 ComputerWeekly.com article by Warwick Ashford.