Financial Institutions Fighting Against Fraud

By David Paulding, Regional Director, Genesys

Financial institutions and banks remain high risk for fraud and data security as they provide a lucrative target for fraudsters. In order for financial institutions to eliminate gaps created by criminal opportunists they need to consider all areas of potential target.While technology has spurred the development of new methods of fraud, modern fraudsters are still using some of the oldest tricks in the book. And this includes phone fraud.

Fraudulent calls made to contact centres are up 113% according to the latest figures from Pindrop, and banks and financial services organisations need to be braced for this trend to continue. Companies are investing billions on bolstering their cyber defences, but the phone channel is often overlooked, making it the weakest link for hackers and fraudsters to exploit.

At a recent Business Reporter briefing sponsored by Genesys on preventing contact centre fraud in the banking sector, experts came together to brief leading CXOs from major banks on prevention.

In many ways, the contact centre represents the perfect storm for would-be fraudsters looking to breach system security. On the one hand, we have contact centre agents who must deal with high workloads using the tools they have available to them. On the other hand, these fraudsters are smart, determined and very well versed in exploiting system vulnerabilities.

This is not an isolated problemfor financial service providers. Contact centre-related fraud is now truly ubiquitousand affects many areas such as mobile phone claims, account liquidation and policy surrenders. For example, last year UK telecoms company Three experienced a massive data breach when hackers accessed its database using stolen employee information, perhaps through a scam email. The question is how best to tackle this pernicious problem.

The greatest challenge to combatting fraudsters is tackling who these people really are. Or more accurately,whether or not they are who they say they are. Thankfully, identification technology, for example call display, can assist in this quest, acting as a gatekeeper. This essential task has a dual benefit to banks. Firstly, it addresses customer authentication. Secondly, it can speedup the process of customer engagement. As a result it improves the customer journey.However, the process of identifying customers is not achieved through a set of common standards.

For example, the use of Interactive Voice Response (IVR) to allow the customer to input security information, such as account details and date of birth using Dual Tone Multi Frequency (DTMF) technology or speech has been widely used yet it is still rudimentary in function. What’s more, this technology is often used in isolation,relative to other contact centre applications. Then there are the inane triage ‘security’ questions, such asfirst pet and mother’s maiden name. This data is the fraudster’s bread and butter and can be obtained with a little research, guess work and repetition. Clearly, a more consistent or sophisticated approach is required to keep ahead of the villains.

The use of more intelligent IVRs, recording applications, speech analytics and more in-depth customer profiling will certainly help to combat fraud. Connecting all your customer-related data sources and presenting relevant information in a single application will also empower the contact centre agent to draw quick conclusions if something isn’t quite right.

Developments in pioneering technology are also breaking new ground, includingthe topic of biometrics and artificial intelligence (AI). Humans are unique individuals and, as such, display patterns that can be recorded, analysed and identified. From voice signatures to retinal images, our DNA gives our real identification away.

Whilst investment in this sort of technology doesn’t come cheap, neither does the pain of being defrauded. What is apparent is that financial institutions need to raise their game because fraudsters are not going away.

By David Paulding, Regional Director, Genesys

Financial institutions and banks remain high risk for fraud and data security as they provide a lucrative target for fraudsters. In order for financial institutions to eliminate gaps created by criminal opportunists they need to consider all areas of potential target.While technology has spurred the development of new methods of fraud, modern fraudsters are still using some of the oldest tricks in the book. And this includes phone fraud.

Fraudulent calls made to contact centres are up 113% according to the latest figures from Pindrop, and banks and financial services organisations need to be braced for this trend to continue. Companies are investing billions on bolstering their cyber defences, but the phone channel is often overlooked, making it the weakest link for hackers and fraudsters to exploit.

At a recent Business Reporter briefing sponsored by Genesys on preventing contact centre fraud in the banking sector, experts came together to brief leading CXOs from major banks on prevention.

In many ways, the contact centre represents the perfect storm for would-be fraudsters looking to breach system security. On the one hand, we have contact centre agents who must deal with high workloads using the tools they have available to them. On the other hand, these fraudsters are smart, determined and very well versed in exploiting system vulnerabilities.

This is not an isolated problemfor financial service providers. Contact centre-related fraud is now truly ubiquitousand affects many areas such as mobile phone claims, account liquidation and policy surrenders. For example, last year UK telecoms company Three experienced a massive data breach when hackers accessed its database using stolen employee information, perhaps through a scam email. The question is how best to tackle this pernicious problem.

The greatest challenge to combatting fraudsters is tackling who these people really are. Or more accurately,whether or not they are who they say they are. Thankfully, identification technology, for example call display, can assist in this quest, acting as a gatekeeper. This essential task has a dual benefit to banks. Firstly, it addresses customer authentication. Secondly, it can speedup the process of customer engagement. As a result it improves the customer journey.However, the process of identifying customers is not achieved through a set of common standards.

For example, the use of Interactive Voice Response (IVR) to allow the customer to input security information, such as account details and date of birth using Dual Tone Multi Frequency (DTMF) technology or speech has been widely used yet it is still rudimentary in function. What’s more, this technology is often used in isolation,relative to other contact centre applications. Then there are the inane triage ‘security’ questions, such asfirst pet and mother’s maiden name. This data is the fraudster’s bread and butter and can be obtained with a little research, guess work and repetition. Clearly, a more consistent or sophisticated approach is required to keep ahead of the villains.

The use of more intelligent IVRs, recording applications, speech analytics and more in-depth customer profiling will certainly help to combat fraud. Connecting all your customer-related data sources and presenting relevant information in a single application will also empower the contact centre agent to draw quick conclusions if something isn’t quite right.

Developments in pioneering technology are also breaking new ground, includingthe topic of biometrics and artificial intelligence (AI). Humans are unique individuals and, as such, display patterns that can be recorded, analysed and identified. From voice signatures to retinal images, our DNA gives our real identification away.

Whilst investment in this sort of technology doesn’t come cheap, neither does the pain of being defrauded. What is apparent is that financial institutions need to raise their game because fraudsters are not going away.