The banking industry, like all other tech-connected industries, is in the middle of an evolving fraud issue. The problem is global and changing by the minute as fraudsters are finding new and sophisticated ways to steal credentials, gather data, and hold information for ransom.
According to McAfee, cybercrime is costing the global economy around $600 billion, or .8 percent of the global gross domestic product. Whether it’s credit card fraud or data theft against banks, the financial world is a major player in this growing and evolving threat.
But new technologies are being implemented and pursued in order to cut down on the impact of fraud. From data analysis to artificial intelligence, the financial world is looking to protect the information and finances that customers are trusting them with.
The Role of Cybercrime Insurance
For banks and other financial institutions whose clients and customers depend on their services to protect their information and finances, having the right bank crime insurance, such as wire fraud coverage and more specifically cyber liability, is another integral part of the fraud discussion.
Bank crime insurance provides banks the protection they need to be financially protected during a cybercrime issue. Cybercrime groups are stealing hundreds of millions of dollars, and while law enforcement is discovering these criminals, customers still suffer a loss during this process. Having bank crime insurance will cover first-party or third-party losses including defense costs, ransom payments, and regulatory fines.
Data Analysis Software
This kind of technology works to sniff out fraudulent activity by allowing fraud examiners to analyze business data and check to see how well the internal control system is working. From there, analysts can designate transactions that note any fraudulent activity or an elevated risk of fraud. This kind of software can hunt down certain schemes that are popularly used by fraudsters are session stealing, key-logging, and phishing.
If the risk of fraud goes past a certain threshold, financial institutions can utilize a continual approach to fraud detection. The majority of modern financial service companies have upped their management requirements for data as an audit adjustment is moving to a more risk-based and longstanding model.
Artificial intelligence has been helping banks optimize their interactions with customers by machine learning. The technology has become a more popular security measure by utilizing things like predictive analytics, recommendation engines, and voice recognition.
An important use of artificial intelligence in banking is detecting fraud and cracking down on illegal actions by bad actors. Banks are using AI to act more vigilantly against cybercriminals and address complex problems in real time in order to prevent major losses. AI also helps with the monitoring process, capable of learning in a more fast-paced environment and respond to fraud techniques on the fly.
When a bank account is being monitored through analysis software and artificial intelligence, user patterns can be distinguished. If any abnormal activity shows up, the technologies can flag it for review. Detection mechanisms can analyze transactions in a fraction of a second and be able to approve non-fraudulent activity quickly or mark unusual behavior.
In the coming years, artificial intelligence and data analysis will become major components of banking institutions’ security protocols. By saving banks considerable money and eliminating complex and layered fraud cases, banks will help to cut out the growing threat of cybercrime.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.