Cybercrimes and frauds continue to be a perennial problem facing various industries. The highest implications reflect on the financial sector though – hammering the need to continually upgrade security systems and adopting shields that identify risks faster. In doing that, they also need to implement solutions that keep the customers’ experience smooth and simplified. This may become complex for the Fintechs, isn’t it? There are ways to tackle this. 

Before we jump to the solutions, taking a quick look at the different types of frauds can prove significant for you. 

Types of Common Cyber Frauds

New Account related Frauds: 

These frauds are reported soon after opening a new account. These frauds are exceptionally risky and damaging since tracking back their history and records remains near to impossible in these cases. These need to be checked up and tracked through any kind of benign activities being performed after opening of the new account. Under most circumstances, new account frauds occur within 90 days of opening of the account. 

Card-not-present or CNP frauds

This type of fraud is severely common and can become costly for the lending systems. A high amount of risk mitigation has to be employed to manage this category of fraud. The payment standards and compliances can help prevent these kinds of frauds and ensure data security. Features such as Address verification service, card verification value etc help keep the cards unique, valid and recognizable.  

ID Frauds 

The most common and wide-spread form of fraud, Identification fraud hits various industries and brings huge amounts of damages. This practice involves unethical and non-permitted use of a person’s data – without authorization – to deceive another party. 

Use of Fake IDs, synthetic ID frauds etc to acquire critical documents such as driving licences, bank accounts for even credit cards etc fall in this category and cause damage to the systems as well as the people whose identity gets misused. 

The Prevention – Solutions, Strategies and Best Practices 

AI-based ID and Biometric Authentication:

Intelligent AI-powered solutions that can smartly detect any kind of deviations and defiance at the initial stage can save millions for businesses. Preventing frauds can become a possibility if businesses opt for effective ID verification solutions that are further powered by liveness detection and proof of possession verification etc. Combining liveness with proof of possession can add a double check layer for verification. 

Data from Different Sources for Fraud-fighting: 

Mobile IDs can go a long way in helping collect data about a user which can be matched up or cross-checked to ensure the applicant is genuine. Shipping addresses, card numbers, access to mobile info such as contacts, camera etc. This practice can effectively help differentiate between legitimate customers and fraudsters. 

Making Fraud Prevention a Priority 

There are a set of best practices in Fraud prevention that can be commonly implemented by all the industry players to make sure they contribute enough. Preventing frauds by making it a top priority is the need of the hour. From options for eKYC to investing in the most trusted solutions around these, business players can take their digital transformation and bring the right fruits for their investment.