There are many ways to prevent fraud, but having the tools to detect it happening should be a higher priority investment. Chris Stephens, Head of Fraud & Security Analytics at Callsign, tells us what it means to have good defence mechanisms in place and discusses why effective communications in fraud prevention are incredibly important.
In 2020, much of the global workforce and productivity moved online. So too did fraud, scams, social engineering and malicious activity. This digital shift contributed to the proliferation of data breaches and ransomware attacks and consumer fraud in 2020: research shows that 83% of UAE businesses surveyed had seen a change in cybercrime as a result of the pandemic, becoming more vulnerable to threats. But why is this happening?
Organisations are taking strong measures to protect their business, customers and reputations, especially in the financial sector.
However, fraud is still occurring every day. The tactics used by fraudsters are becoming more sophisticated; from advanced social engineering techniques to simply targeting users and forcing them into digital interactions that they wouldn’t usually choose.
Despite far-reaching email campaigns, embedded adverts and in-app messages to alert users to scams and fraud, now more than ever, consumers are more vulnerable to scams than they have been.
Communication issues
Effective communications in fraud prevention are incredibly important, good defence is the best offense.
Due to the pandemic, banks have been forced to reduce their physical presence and operate online. This creates challenges for customers who are not familiar with accessing online services and what experience they should expect. Banks risk excluding or leaving behind less savvy customers who need to get up to speed quickly with the new digital world both in terms of receiving communications and banking services.
Coupled with this, there are new fraud scenarios to contend with. Scams related to PPE, vaccinations, Bitcoin, investments and cross-border business have all risen too.
Holes in the safety net?
All these scams have common factors that make it difficult for banks to provide impenetrable security for their customers.
For example, current safety nets usually offer a one-size-fits-all approach, with warning messages embedded into the user journey at the same place every time a user logs in, regardless of whether it’s safe (or not).
This is further compounded because different geographies adopt different positions on the default responsibilities for fraud. These can vary from putting the onus firmly on the customer, to the UK approach of a voluntary code that offers additional protection to customers.
Methods such as the voluntary code offer customers some protection, but not banks. The code doesn’t prevent scams which are hard to detect.
The priority must be fraud prevention
While detecting fraud is a first step, it is not the answer. The solution must be to prevent fraud happening.
Education is critical in fraud prevention. If customers are aware and understand what fraud and scams look like, they can mitigate the risk of being scammed. Here is where communication plays such an important role – customers need to be guided at different moments and in different ways in their online experience, to prevent fraud.
And while banks understand the benefits of providing smooth user journeys, it doesn’t mean that friction should be abandoned altogether – but it needs to be timely, contextual and appropriate. It’s critical to provide consumers with messages that won’t be ignored, delivered only when they are needed with warnings that are tailored to the individual customer and each individual moment.
The question is; how can this be accomplished?
The Callsign approach to preventing scams
Callsign’s technology takes a passive, less intrusive approach. Technology looks for signs of danger and alerts the customer only when behaviours or transactions are unusually different, rather than constantly intervening. Effective fraud detection and prevention needs a holistic view, one that considers all of the scam risk factors, not just indicators in isolation: warnings and education are critically important parts of the equation and should be used when appropriate.
Callsign technology monitors threats and uses behavioural biometrics passively and only intervenes when there’s a high risk of danger. For example, Callsign detects if a customer is typing with one hand – an indicator that they are being coached by a fraudster on the phone. If a customer seems prone to be a victim of a scam, they will receive a tailored warning message that they could be victims of fraud and asked further questions to pinpoint the risk.
This type of intervention can be tailor-made to best fit the most appropriate interaction at the time. As Callsign is designed to seamlessly integrate with existing systems, it means that risk gaps in authentication and identity can be quickly and easily closed.
Fraudsters will always be fast in identifying and exploiting new opportunities and victims as technology and society continue to change and evolve. What it means to be a vulnerable target is constantly changing, but it doesn’t mean they have to remain vulnerable.
Callsign always prioritises identity and authentication for its customers and organisation, providing safety and security.
