Technology and trust must go hand in hand
Technologies are undoubtedly transformative for businesses and their customers. But to fully deliver the promised benefits, technologies must consciously build trust amongst all legitimate users and stakeholders. Trustworthiness is becoming critical by the day in an increasingly digital world because of the rising incidence of online fraud. Just as quality at the source is a mantra for manufacturing companies, the detection, and prevention of fraudulent transactions as soon as they originate is important for banks and financial institutions. At the same time, customer convenience has to be balanced out.
Regulators expect banks to enhance their digital abilities to detect/prevent frauds/crimes
Regulators play a key role in ensuring the safe, smooth, and efficient functioning of the banking and financial systems within their individual jurisdictions. As such, central banks worldwide have begun to tighten various regulatory requirements in order to reduce the risk of fraud made possible by technological or process loopholes in the systems used by banks and other financial institutions.
In March 2022, the Bangko Sentral NG Pilipinas (“BSP”, the central bank of the Philippines), published amendments to its “Regulations on Information Technology Risk Management” with the specific objective of enhancing customer protection. To ensure that digital banking channels are made safer and more reliable, the BSP requires banks operating in the Philippines to implement automated and real-time fraud monitoring and detection systems capable of identifying and blocking suspicious or fraudulent online transactions. Starting 1 September 2022, banks must be prepared to show BSP their action plans; and full compliance with a readiness plan is expected by 31 December 2022.
While the Fraud Management systems implemented must commensurate with the bank’s operations and the scope of its digital platforms, BSP does expect that the solutions that banks put in place will, at a minimum, deliver the following capabilities:
· Monitoring, collecting, and analyzing transaction data arising from all physical and digital banking and non-banking channels;
· Integration with the bank’s Anti Money Laundering (AML) systems to provide a more robust and comprehensive mechanism to prevent financial crimes (and not just detect them);
· Building customer profiles and analyzing behavior to detect frauds based on changes in usage patterns; and
· Secure scalability to handle growing transaction volumes.
FRM solutions must give robust Fraud detection and prevention capabilities without damaging customer relationships
Frauds and other operational risks not only damage customer confidence in individual banks (and the banking system as a whole) but can also lead to financial losses (reparations, penalties) and harm your brand/reputation. Clearly, the costs of not having a state-of-the-art Fraud & Risk Management System (FRMS) are high.
While there are many FRMS solutions out there, not all of them are equally efficacious. This is because each one uses different protocols to detect and analyze risks and thereafter, determine further courses of action.
Wibmo’s Trident FRM platform offers multiple advantages
Wibmo’s Trident is an enterprise fraud and risk management platform that uses advanced authentication protocols and ML-driven statistical models. Our platform makes approval/ challenge/ decline decisions based on rigorous, real-time assessment of more than 100 parameters related to the device, user, and transaction (e.g., merchant, location, IP address, time of the transaction, value, etc.). This Risk-Based Authentication (RBA) approach provides a more robust and reliable assessment of the risk of every individual transaction. The omnichannel capability of the platform is an added advantage wherein the bank’s operations team gets a central view of their customer’s transactions across channels
For banks operating in the Philippines, Trident can ensure full compliance with BSP’s amended regulations within the stipulated timeframe. However, irrespective of where your bank operates, there are many other reasons why Trident could be the right FRMS solution for your bank:
· Many banks rely on disparate legacy systems and point solutions for specific functions (e.g., AML, branch-based KYC transactions, etc.). Integrating data from myriad systems is neither easy nor efficient; the chain is only as strong as the weakest link. Therefore, our risk management platform is API-driven. What is more, it uses 360o degree customer data and insights to detect anomalous behaviors that might indicate fraud or misuse.
· Trident is sensitive to the need for banks to deliver a seamless, speedy, and superior customer experience for every legitimate transaction; this minimizes customer friction– key to building loyalty and enhancing lifetime value.
· Customers (and fraudsters) can use multiple channels to effect transactions (e.g., 3DS, mobile payment, ATM/POS, online retail/corporate banking). The FRMS solution your bank adopts must be able to function equally effectively- and seamlessly- across channels (to handle situations where customers legitimately switch channels). Our platform uses AI/ML to safeguard customers, merchants, card issuers, and networks in an omnichannel environment. Sometimes, frauds are perpetrated at the merchant level (e.g., by employees misusing customer cards for fraudulent transactions). The Trident platform can detect and prevent such misuse as well. Trident enables full compliance with FATF and AML-CFT, thus helping to prevent financial crimes.
· Your bank works with various card networks (Visa, MasterCard, American Express, etc.). Trident is compatible with all networks; it gives you get a network-agnostic RBA score thus strengthening your bank’s overall ability to detect, prevent and manage fraud risks.
· Trident can be fully deployed on Cloud, thus assuring high availability and scalability so that 100% of your bank’s transactions are processed in real-time to validate the authenticity and assess risk before completion.
· Our FRMS platforms are rules-driven. This lets your bank respond quickly to emerging threats with the help of “quick rules” and “expression rules” for more complex threat scenarios. The bank will also be equipped with Rule Wizard wherein the operations team can build rules on the fly
· Quick investigation and resolution of transactions are important to ensure customer satisfaction, and regulatory reporting/compliance as well as enhancing the bank’s preparedness to prevent future false positives. Efficient and workflow-driven case management capabilities built into our platform allow investigators to track, investigate and resolve transactions quickly. This also reduces your bank’s operational expenses– a major benefit gave the pressure on margins.
· Banks that adopt Wibmo’s Trident FRMS platform additionally stand to derive two benefits that go beyond the above capabilities and advantages:
o Access to anonymized fraud markings across issuers. Derived from Wibmo’s Fraud Prevention Network score, these allow your bank to learn from fraud methods in other geographies and thus be ready to deal with them; and
o Additional protection through Wibmo’s 24×7 Fraud and Risk monitoring team that constantly tracks suspicious transactions and swings into action to manage fraudulent events.
· Finally, given Wibmo (and Trident’s) growing customer base globally, we are looking to expand our fraud detection/prevention model into a network. This, we believe, will benefit all members of our consortium by giving them better fraud samples, higher levels of data privacy, and the opportunity to share global best practices so that each member becomes better equipped to deal with fraud and other risks.
Whether your bank operates in the Philippines or anywhere else in the world, we believe that our Trident platform can give your bank a distinct edge in the area of fraud and risk management. Get in touch with us at apacsales@wibmo.com, to schedule a conversation to explore your needs.
Author:
Sudhir Kamath, Senior Director- APAC
Wibmo A PayU/Naspers FinTech Company