How New Tech Eases the Burden on Fraud Teams


Because it is a low-risk, high-reward endeavor, online banking fraud has grown into a massive industry for cybercriminals. The sheer volume of alerts received by banks and other financial institutions overwhelms compliance teams. The volume of false positives and negatives generated by traditional anti-fraud solutions exacerbates the situation. A new approach is urgently needed to save fraud teams time and money.

Reducing False Positives for Fraud Teams

Dealing with numerous false negatives and false positives is one of the leading causes of high operational costs—and a significant burden for compliance teams. When bombarded with alerts, analysts must prioritize them based on their risk level before deciding how to proceed. Because analysts must first determine which threats to escalate and what actions to take against these threats, this process takes time. There are several reasons why false positive and negative alerts occur.

Alerts from family fraud situations frequently overwhelm compliance teams. According to recent data, 17% of family fraud victims’ personal information was used to open a checking account. Meanwhile, 15% of respondents reported that their personally identifiable information (PII) was used to open a new credit card.

This means that compliance teams will waste time and resources investigating every type of family fraud scenario. Financial institutions must invest in a solution that classifies anomalies detected when friends or family members assist account owners as low risk, and when others take advantage of their loved ones as high risk. This eliminates the friction caused by false positives and allows analysts to concentrate on high-risk threats.

Banks Should Focus on Individuals

Another factor contributing to the high number of false positives and negatives is the way traditional online fraud prevention methods look for bad actors. Typical methods categorize users into “clusters” of good or bad actors. To find a match, fraud prevention solutions must comb through massive databases containing millions of bad or good actor attributes. This process may also classify a large number of new users as unclassified, which is neither good nor bad.

The majority of online fraud is perpetrated by unclassified bad actors. Instead of using this profiling approach, banks require a new method of analyzing users that examines each user on an individual, more granular level, including comparing current behavior to past behavior. This method analyzes the risk of every user interaction by continuously examining their behavior in conjunction with device and network assessments, allowing financial institutions to create “cyber profiles” for each user.

These cyber profiles function like digital fingerprints, evolving with time and operating “behind the scenes” without interfering with the user experience.By concentrating on recognizing each individual user and creating a digital profile, the number of false positives and negatives is greatly reduced. This method significantly reduces both fraud losses and the costs of online fraud prevention operations—as well as the burden on fraud teams.


Automating Fraud Response

Fraud teams benefit from tools that enable them to be proactive in their fight against fraud rather than relying solely on detection and alerting processes. Allowing compliance teams to configure automated responses that prevent attacks and block known bad actors is the most efficient way to prevent fraud losses, reducing analysts’ workloads while stopping fraud in its tracks. More importantly, compliance teams can tailor their response based on the risk, giving them complete control over the online fraud prevention process.

In fact, financial institutions can implement a proactive mindset to prevent fraud across the board by implementing an Active Defense strategy to relieve pressure on their fraud teams. “Active defense” in cybersecurity refers to actions that make it more difficult and costly for cyber adversaries to carry out their attacks.

Fraudsters Automate – Banks Should Too

Bank and financial institution compliance teams are frequently caught between a rock and a hard place. On the one hand, the scope, sophistication, and frequency of online fraud are increasing. On the other hand, compliance teams are in short supply and overworked as they are constantly bombarded with alerts and notifications.

Fortunately, the same modern technological advances that have aided online attackers can now help defenders. With the introduction of new tools specifically designed to assist fraud teams, such as automation, behavioral biometrics, and KYC, fraud analysts are now well-equipped to deal with the ever-changing landscape of online banking and financial fraud.


Schedule a demo with us today if you are looking for a fraud solution that reduces the burden on your bank’s fraud teams by truly getting to know your users from day one.

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