Banks, faced with complicated digital security scenarios, are looking to guard their systems and customer data with analytics-based approaches.
FREMONT, CA: Banks are in the pursuit of finding feasible ways of securing systems and services from rampant cybersecurity threats. There have been enough financial frauds in the recent past to drive banking institutions into considering novel methods of risk monitoring and prevention. Data analytics offers impactful solutions in this respect. Analytics solutions that have been customized to deliver anti-fraud services to banking firms are enabling a modern, technology-driven approach in managing security concerns. Intelligence and automation are the mainstays of advanced analytics solutions, making fraud analytics the key for relevant and reliable security capabilities.
The extent to which fraud analytics can save banks from exposure to risks depends on the security features provided by the vendors, as well as on a banking firm's ability to implement the solutions optimally. This article talks about the events leading up to the widespread adoption of fraud analytics in banking and what banks can expect from the analytics tools.
Scope of Overcoming Challenges
Adopting advanced technology has become viable from a financial and utility point of view. High network speeds, cloud computing, artificial intelligence, machine learning, IoT, and data analytics are making their way into every-day business applications. As advantageous as these technologies might be for banks, they have given rise to cybersecurity risks. Cybercriminals are always on the look-out, looking for opportunities to discover chinks in the digital infrastructure of banks, to unleash sophisticated attacks. Advanced technologies have magnified the security problem, although banks have always had to deal with financial crimes. The new services offered, the new channels of operation, and the evolving regulatory landscape have converged to create significant challenges for banking firms. According to a report by McKinsey, banking frauds led to a loss of more than $31 billion globally in 2018. Fraud analytics solutions have the potential to curb the rising number of attacks and reduce losses. With fraud analytics, banks can take advantage of digitalization without having to worry about the repercussions.
Intelligent Visibility and Monitoring
Responding to the worsening security situation in a proactive manner requires technological intervention. The first thing that banks must look to attain is visibility. As the volume of operational data expands, legacy systems are falling short of capabilities. Modern digital ecosystems require efficient monitoring tools that equip banks with the ability to access extensive data sets effortlessly. Only with comprehensive monitoring ability, banks are able to keep an eye on potential frauds and eliminate them before they advance. Fraud analytics solutions are built to cater to these requirements. Advanced algorithms empower banks to access and process vast data reserves and derive intelligence. This intelligence enables systems to take necessary measures to prevent cyber risks. With machine learning-enabled solutions, applications are also able to self-train, thereby improving risk detection over time. The numbers of false positives have also reduced significantly today, making fraud analytics more accurate than ever before.
Strengthened Security: The Road Ahead
The success of fraud analytics in helping banks improve cybersecurity has increased the demand for innovative solutions in the market today. As banks diversify their offerings in the digital era, they are also looking forward to making the services breach-proof. The number of online transactions and the outreach of mobile banking is increasing, making fraud analytics is indispensable for the banking industry. Now the banks can easily ensure in real-time, the safety of every transaction taking place anywhere across the world from a single, centralized platform. Digital barriers for hackers are getting stronger, facilitating a safe experience for bank customers. A minor anomaly is enough to set entire systems on alert and automatically block intruders from accessing sensitive information.
With technologies growing rapidly, the banking industry can expect several innovations in fraud analytics that will help banks tackle hackers with ease and manage banking regulations efficiently.
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