Financial fraud – how it is detected and how banks protect their clients
- 4 min reading
Financial fraud – what does it usually result from?
Unfortunately, even the most modern bank protection system does not guarantee one hundred percent security of transactions. On the other side is the client, who often unwittingly jeopardises the security of transactions.
How can they do this? For example:
- by using open, unsecured Wi-Fi networks when making transactions;
- not updating their computer’s system protection software;
- falling into the trap of hackers and giving them sensitive data.
Hacking attacks are on the rise and it is up to the bank to protect against fraud, above all, ensuring financial fraud detection in time.
Financial fraud detection by banks
While the bank does not have complete control over 100% transaction security, it can significantly increase it through:
- Authentication methods such as 2FA. Two-factor authentication is a fairly effective method of protecting client data, but it cannot protect them in every case. It is also not a solution liked by clients, as it increases the time it takes to complete transactions;
- Modern monitoring programs. In order to protect client data and – above all – client money as effectively as possible, the bank must additionally protect itself against hacking attacks. The bank should therefore carefully analyse clients’ behaviour patterns, login methods, etc. in order to ensure any financial fraud detection in advance. This is made possible by modern financial fraud detection software such as Comarch Smooth Authentication.
Effective protection against fraud
Financial fraud detection software such as Comarch Smooth Authentication are designed to combat fraud. This system is able to provide financial fraud detection on both desktop computers and mobile devices.
The system analyses the client’s behavior each time, checking whether it is taking place in a typical manner. This makes it possible to distinguish whether a transaction is performed by a human or a fraud algorithm. Financial fraud detection software is very sensitive in this aspect and analyses, for example, whether the user types much slower or less fluently than usual. This is then subject to a scoring analysis, based on which the system takes further action. It may ask for 2FA authentication, block a transaction or perform phone verification.
Comarch Smooth Authentication additionally allows to:
- Detect identity cloning attempt. The system can detect temporary e-mail addresses that can be used for multiple uses of the same promotion;
- Detect malware. It can detect, e.g., whether the applications installed on the end user’s phone are not using excessive privileges and whether the device is not running in root/jailbreak or debugger mode;
- Analyse device data. The financial fraud detection software analyses the device used to perform the transaction and compares it with those previously used by the client and those often used by fraudsters.
What are the benefits of a bank purchasing such software?
Of course, the most important of the benefits, for both the bank and the client, is the increased security of each transaction and faster and more efficient financial fraud detection. Comarch Smooth Authentication software also has other advantages. These include:
- Comprehensive fraud protection – the software is fully compatible with both computers and mobile phones;
- User friendliness – no additional software required;
- Requires no additional work – just install it and you don’t have to do anything else. The system itself takes care of security and checks transactions without involving the end user;
- Usability – the software guarantees a user-friendly authentication and authorisation process.
As you can see, having financial fraud detection software such as Comarch Smooth Authentication allows to better protect client’s money and avoid having to compensate the bank for losses. As a result, it enables the creation of a long-term, trust-based relationship with the client. The client will be more willing to work with a bank that provides financial fraud detection and security, and entrust further funds to it in the future.