Protecting your bank from fraud and cyber crime is critical if you want to reduce losses and safeguard your reputation, but you need to make sure that your approach is effective.
If your fraud detection and prevention work flows waste time, you are losing money which is counter productive, and if they’re missing fraud, you’re damaging your reputation and losing any more money. Use these tips to improve your workflows:
1. Identify your goals
Preventing fraud is your primary goal, but ideally, you should refine this goal even further. For instance, you may want to set a goal of reducing attacks by a certain percentage from last year. Or, you may want to strengthen fraud prevention related to a specific payment channel.
Goals provide you with helpful benchmarks as you assess and refine your processes.
2. Train your employees continuously
Your employees need to understand as much as possible about the job they are doing. Make sure to hold regular training sessions where you cover the normal patterns of legitimate transactions and how they compare to the behavioral profiles of fraudulent transactions.
If your employees understand the archetypes of legitimate and fraudulent behavior, they will be more likely to spot fraud.
3. Get to know your current workflows
Even if you don’t have prescribed workflows in place, you still have workflows, and in some cases, you may have detailed instructions about workflows but your employees’ practices may deviate from your plans. In all cases, you need to understand how your financial institution is dealing with fraud and potential fraud.
Interview your fraud mitigation team as well as your personal bankers and tellers, and find out exactly what they are doing to mitigate the risk of fraud. You must interview the frontliner workers who are dealing with fraud about what they’re actually doing. Talking with your management team about what your workers are “supposed” to be doing won’t lead you to the insights you need.
As you talk with your frontline employees, get a sense of what they do, what takes the most time, where they experience a lot of repetition, and the challenges and response times of interacting with other departments.
4. Look for inefficiencies in your current workflows
Once you understand your workflows, look for places you can improve. In particular, find opportunities for automation, and if you see fraud slipping through cracks, identify ways to tighten your controls.
Here’s an example. Say your current policy is to have a manager review all checks over a certain amount, and you almost never cash fraudulent checks over that threshold. However, you recently had several smaller fraudulent checks cashed over the counter at your bank.
In this situation, you need to adjust your workflows and find a way to examine checks written for smaller amounts. Your workflow adjustment may vary. For instance, you may have the tellers ask for additional ID verification before cashing checks over the counter or you may decide to run all the presented checks through an anti-fraud solution that looks for forged signatures.
5. Make sure you meet regulatory requirements
Make sure your workflows meet both internal and regulatory requirements. If fraud happens due to your financial institution’s neglect to follow regulations, you may face additional liability and penalties.
6. Prioritize your resource allocations
In addition to thinking about the efficiency of your workflows, also make sure that you’re allocating your human resources appropriately. Don’t waste talent by having highly skilled people handle tasks that could be automated or done by junior employees. At the same time, don’t rely on junior employees to handle anti-fraud tasks that should be handled by specialists.
7. Test your anti-fraud efforts
Work with a specialist to engineer white hat attacks against your organization. Ideally, you want to test everything from network security, to your employee’s resistance of phishing emails and social engineering attacks, to your software’s ability to spot fraudulent transactions.
Assessing your fraud detection workflows needs to be a constant process. The workflows that fight today’s fraud may not stand up to new and emerging threats. Make sure that you are constantly analyzing and refining your workflows.
At SQN Banking Systems, we offer a range of fraud prevention and detection solutions and services. We also offer fraud process reviews for new and existing clients. Are your fraud workflows as strong and efficient as they should be? Let us check out what you’re doing and help you move in the best direction possible. To learn more, contact us today.