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Description automatically generated with medium confidence The growth of digital banking and e-commerce, spurred by the COVID-19 pandemic, provides fertile ground for fraudsters and money launderers to commit crimes anonymously. A thought leader on fraud and cybercrime, Clive Gungudoo, Director of Financial Crime and Risk Management at MoData, highlights five critical controls organizations must have in place to protect their digital customer journey.
For Clive Gungudoo, educating and informing people about financial fraud and the threat it poses to organizations and individuals is more than just a job, it’s his passion. And with over 25 years of experience in the field, Clive is not only familiar with the various sophisticated methods used to commit fraud, he has an in-depth knowledge of the exact solutions organizations must implement to minimize risk. for customers – and for their own reputation.
“Organizations need a layered approach to fully protect themselves and their customers against fraud and money laundering risks,” says Clive. “This means that a comprehensive set of non-intrusive financial crime risk management controls can and should be integrated throughout the digital customer journey to proactively flag potential fraudulent activity, build customer trust and ensure compliance. regulatory obligations.”
As Clive explains, while many customers were already using online and digital services before the pandemic hit, the global COVID-19 lockdowns have pushed that number up significantly as people have been forced, by necessity, to become digitally active. For many, it was their first time using online banking and shopping. “While this online business presence provides 24/7 customer convenience and opportunities for significant revenue growth, it also provides fertile ground for bad actors – like fraudsters and money launderers. – to commit crimes.”
For organizations to conduct their online business securely and provide their customers with peace of mind, they must incorporate these five basic controls into their digital customer journey:
1. Dynamic device fingerprinting and risk analysis
Fraudsters typically use stolen devices or manipulate previously used devices to impersonate a known trusted user or as a new user, thereby allowing them to remain anonymous.
“As soon as we introduce a new player, device – a desktop, laptop, mobile or tablet – into the transaction, financial service providers face a trust dilemma – they have to know who is actually hiding behind the device,” says Clive. “Dynamic Device Fingerprinting enables organizations to accurately detect cyber crimes such as device and location spoofing, device switching, IP reset, emulators, fake devices, click farms, botnets , home proxies, “man-in-the-middle”, “man-in-browser”, and remote access attacks – as well as other advanced methods used by fraudsters. This real-time service provides a fraud score and a cyber risk analysis that is transmitted to the company so that it can decide whether to authorize or dispute the new registration, login or payment request,” explains Clive.
2. Behavioral biometrics
While legitimate and private data can be stolen or sold on the dark web and fake or synthetic identities can be fabricated, each user exhibits specific behavioral patterns that cannot be stolen or duplicated. Behavioral biometrics are needed to detect and prevent account sign-up and takeover fraud by passively and continuously monitoring user behavior from login to logout.
“The behavior is unique to each user – whether you are left or right handed, the size of your fingerprint, your keystrokes or the time between sessions. Behavioral biometrics analyzes user behavior in real time, to detect that your behavior is not in line with how you normally transact on your account. It uses moving movement patterns and accounts for criminal patterns to flag fraudulent behavior,” says Clive.
3. Detection of false documents
Often, organizations’ due diligence and credit processes require customers to upload documents digitally. However, skilled fraudsters are able to expertly manipulate documents such as IDs, driver’s licenses, pay stubs, bank statements and other FICA documents, proof of income, vouchers order and invoices so that changes cannot be detected with the naked eye.
“There are professional document forgery services out there – they’re performed so expertly that regular checks and manual checks just aren’t enough,” says Clive. “A sophisticated document falsification detection service is essential and can be applied throughout the customer lifecycle – from customer onboarding, to re-applying for credit, to supply chain finance. , insurance underwriting and ongoing due diligence.”
4. Real-time transaction monitoring and strong customer authentication
Fraud and money laundering activities are carefully hidden among vast amounts of legitimate transactions in the financial system, making them difficult to detect. Legacy systems typically use traditional data and supervised rules and patterns that reactively generate alarms – many of which are false. “It forces organizations to employ large teams to manage this unnecessary workload which ultimately impacts the bottom line,” says Clive.
Real-time transaction monitoring enables organizations to be proactive rather than reactive by applying a combination of artificial intelligence and expert big data rules to detect and prevent new and known fraud and money laundering threats and typologies money in real time. “It greatly reduces false red flags – and is much more accurate when reporting a problem,” says Clive.
5. Advanced case management
This service enables organizations’ fraud, cyber intelligence, anti-money laundering, operations and investigations teams to unify and work more effectively to manage, track, inform, investigate, prosecute and report fraudulent transactions and suspicious activities. “This service connects the proactive and reactive domain of financial crime risk management through a central intelligence and response center – the time and cost savings are significant, even more so in a hybrid working environment,” says Clive.
At the heart of MoData’s promise to help organizations create an innovative, intelligent, intuitive and safe customer journey is MoData Digital Services (MDS), their software-as-a-service marketplace for all risk management operations. financial crime.
“MDS enables organizations to implement a layered approach and deploy modernized technology that protects their customers and their reputation. Our monthly subscription pricing and pay-as-you-go model means organizations can directly access MDS and our innovative products and services without a massive upfront investment,” says Clive. “As subject matter experts and thought leaders, we continuously scan the market for emerging trends and always ensure that our technology stack is up-to-date and relevant. This means that we are able to give our current and new customers in Africa and the Middle East access to leading global software that matches their market and needs at a competitive price that includes implementation , professional services and support.