Addressing Fraud Risk Requires Multi-Pronged Approach – Report

NICE Actimize and Regulation Asia have published a new white paper exploring the banking industry’s response to fraud and online scams in APAC.

According to the white paper “Advancing the Fight Against Fraud in Asia Pacific”, the rapidly-evolving suite of tools available to fraudsters have helped them to “industrialise the business of fraud” and make it more challenging for banks to stop them.

Remote work arrangements, digitalisation of financial services, and faster payments also increase opportunities for fraudsters—making it necessary for banks to both “detect suspicious activity as well as hold back funds in near real time [which is] a real challenge”.

This requires banks to improve their data collection, authentication and verification processes, as well as develop new monitoring and analytics capabilities, and mechanisms for sharing risk signals across departments.

Recommendations in the paper include the use of tools that leverage device intelligence and behavioural biometrics, which “can work in the background to automatically detect changes in how a customer’s account is being used.”

In the paper, subject matter experts from HSBC and Standard Chartered Bank also highlight the importance of developing real-time payments interdiction capabilities, robust fraud recovery procedures, and strong rapport with other banks to aid communication and recovery efforts when a fraudulent transaction does occur.

A key challenge for banks is also to address the siloed nature of AML and anti-fraud teams at banks. Rather than operating independently, these teams should be leveraging their synergies and contributing their skills, especially given that fraud controls have seen a relative underinvestment compared to AML functions in recent years.

In cases where banks have invested in anti-fraud programmes, many have ended up with multiple overlapping tools that end up being a point of vulnerability rather than a solution. These tools should complement each other rather than operate in silos.

Experts also discuss the regulatory response to fraud risk, with a focus on Singapore and Hong Kong, as well as industry efforts to improve data sharing and collaboration.

The paper is published in full here.

To learn more about this topic, join this complimentary webinar: THE SCAM THREAT: WHAT’S NEXT AND HOW BANKS ARE FIGHTING BACK on 13 SEPTEMBER | 10AM SGT/HKT | 12PM SYDNEY

The paper was published with contributions from Victor Apps and Shweta Ranjan from Standard Chartered Bank and Jamil Ahmed and Will Tully from HSBC.

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