Banking and many other commercial activities have become increasingly digital over the last few years, due in large part to the vicissitudes of the COVID-19 pandemic. Health and safety restrictions gave rise to an urgent need for fast, secure, and convenient ways to conduct financial transactions remotely, and now that the dust has settled, it’s quite apparent that digital-first banking is here to stay. Neither banks nor their customers are eager to relinquish the speed, ease, and wider net of access online banking offers.
The widespread shift toward more digital banking does, however, create opportunities for tech-savvy cybercriminals to likewise exploit this new and still evolving business landscape. In concert with a large jump in digital banking transactions worldwide, criminal activities like phishing, account takeovers, online banking fraud, and other types of cybercrime have also been on the rise in recent years. As a result, it’s more important than ever for banks to familiarize themselves with the digital solutions and current best practices that will help them protect themselves and their customers.
Here are four tried-and-tested tips to help your bank effectively fight back against financial crime:
Any legitimate bank operating today should already have front-end security measures such as password protection, account encryption, and two-factor identification in place. These barriers are meant to prevent hackers from gaining access to customer accounts. However, the increasing incidence of financial crime worldwide makes it clear that today’s criminals have grown adept at disabling or even bypassing many of the mechanisms meant to keep them out.
Banks thus need to invest in next-generation technological solutions that will improve their ability to detect and prevent financial crime from the back end, such as more sophisticated data analytics and customer profiling tools. Dedicated sanction screening software, for instance, allows banks to efficiently assess potential customers, vendors, and other business partners against their jurisdiction’s watch lists, politically exposed person (PEP) lists, legal sanctions, and other lists. Such software is also able to screen for instances of suspicious user behavior and block possibly fraudulent transactions in real time.
Transition Away from Silos to More Holistic Systems
Many traditional banks today still utilize highly fragmented, siloed systems that depend predominantly on decades-old processes and similarly antiquated technology. This is especially the case for banks that have grown over the years by acquiring rival institutions, which can lead to even more fragmentation as different divisions continue to use their own systems. Silos can make it difficult for different bank branches to communicate, which not only compromises the whole bank’s operational efficiency but also cripples its anti-fraud efforts.
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