Reduce Digital Banking and Payment Fraud in 5 Steps

Digital banking and payment frauds involve different techniques, including malware infections and phishing strategies. It affects banks, fintech companies, and other financial organizations.

Cybercriminals aim to steal money, whether phishing, impersonation, malware, ransomware, or hacking. Today’s article will give you a five-step approach to reducing or mitigating digital banking and payment fraud. Read on!

1.    Incorporate a Holistic Customer Onboarding System

Banks, fintech companies, and financial organizations that move from manual processes to digital systems experience numerous challenges, including attacks from hackers and cybercriminals.

Hackers penetrate the system and steal customers’ personal and financial data. However, banks and fintech companies can avoid this problem by incorporating a holistic and sophisticated customer onboarding system.

A cutting-edge onboarding system has various features, including customers’ screening against smart datasets, customer information verification against trusted data sources, and document authentication to prevent fraud.

Banks must invest in tailored customer onboarding systems with specific features. For instance, if you need a software application for your fintech company, you must consider the following features.

•     Facial matching checks
•     Solid data security protocols
•     Malware checks
•     Data encryption algorithms
•     Real-time customer onboarding

2.   Leverage Biometric Data to Prevent Phishing Attacks

Cybercriminals use phishing techniques to steal data from customers or users. Fishing means a cybercriminal posing as a legitimate bank or fintech company and tricking the victim into providing their credentials, including usernames and passwords.

Sometimes, credentials include more sensitive information, such as your password reset verification codes or answers. Therefore, banks must educate their customers or clients about fishing and provide them with educational resources.

Knowledge and preparation can protect banks from phishing. For example, biometric data verification is an excellent way to identify whether a user logging into the system is a fraudster.

For example, biometrics are specific characteristics of a bank’s customers. These traits are challenging to duplicate, like a customer’s voice cadence. A biometric system adds an additional safety layer to prevent bank fraud.

3.   Use Consortium Data to Prevent Account Takeovers

Account takeovers are another problem experienced by bank and fintech company users. Cybercriminals use different techniques to steal login data or credentials and use the information to steal money.

Therefore, banks must collaborate to form a consortium database because it enables organizations to pull data from different sources, increase information diversity, and multiply security and analysis.

Consortium data encompasses collecting intelligence from various sources within the financial industry. Banks working together and sharing data on fraudulent activities can create a database of known cyberattacks or threats.

So, an automated system with machine learning algorithms, artificial intelligence, and predictive modeling techniques leverages consortium data to measure potential threats, reducing the risk of fraud.

For instance, when the system detects someone has taken over the account, it performs specific functions to identify behavioral clues. Based on the analyzed data, the system alerts the account managers to follow the protocols and identify the criminal.

However, cybercriminals sometimes use highly sophisticated infectious codes, preventing managers from identifying fraudsters and recovering the data or lost funds. In that case, banks can use Cyber-Forensics.net services to recover stolen funds.

Online Cyber-Forensics.net reviews show that it is a reputable company with a team of certified, qualified, and experienced professionals who follow evidence-based approaches to recover lost funds.

4.   Keep an Eye on Internal Frauds

Not all banking and payment frauds are due to cybercriminals and fraudsters. Sometimes, a bank employee can steal customers’ data or use sensitive information, including account details and PIN codes, to transfer money to unknown accounts.

Likewise, some fraudsters steal data and sell it on the black market on the dark web. Therefore, banks and fintech companies must implement solid employee vetting, monitoring, screening, and auditing systems to prevent internal fraud and maintain the company’s reputation.

5.   Strengthen Cybersecurity with Machine Learning Systems

Because all banks in the U.S use online systems to conduct their operations, cybercriminals use malware, email phishing techniques, and other malicious software to penetrate the network and change its structure/function. As a result, the bank does not have access to the software system.

The primary cause of this problem is the lack of security protocols and data encryption methods to prevent fraudsters from hacking the system. Therefore, banks must invest in developing machine-learning-based systems to avoid potential threats.

Sometimes, fraudsters create highly sophisticated online companies and prepare fraudulent bank statements. As a result, banks grant loans and packages to these companies. The problem is these companies/businesses disappear after taking loans and never repay.

Therefore, we recommend automating data collection and analysis via machine learning algorithms to verify companies’ information before granting them loans and other financial packages.

Final Words

Online banking and payment frauds have increased in the past couple of years. Although financial organizations have implemented cybersecurity systems, they lack advanced features to perform potential threat analysis.

So, if your organization has already become a victim of online fraud, you can hire Cyber-Forensics.net services to recover the lost funds. It is a reputable company that follows step-by-step, legal, and evidence-based techniques to identify cybercriminals, negotiate on your behalf, and make substantial efforts to recover lost money.