Two critical fraud prevention priorities to combat new threats
Written by Simon Marchand, Chief Fraud Prevention Officer, Nuance Communications
New fraud tactics and risks are emerging—so what should you do to protect your customers and your brand?
Fraudsters thrive in times of disruption, and the social and economic turmoil caused by COVID-19 led to a huge increase in fraud. Identity theft, for example, more than doubled in the US in 2020 compared to 20191. And these are just reported frauds—the actual numbers are likely to be significantly higher.
So it’s no surprise that an Opus Research survey found that 88% of respondents (and 100% of telco respondents) say COVID-19 has accelerated changes in their customer authentication and fraud prevention strategies2. Fraudsters have evolved their tactics to capitalize on new opportunities, and financial uncertainty has increased the risk of fraud from previously honest customers and agents. So, organizations are changing up their fraud prevention approach to meet these new threats.
Synthetic IDs, social engineering, and stolen IDs were the top three concerns expressed by respondents, highlighting that fraud prevention leaders are now focusing less on payment fraud transactions and more on the humans behind the numbers—customers, fraudsters, and agents.
Securing the WFH environment When organizations had to send agents to work from home, the immediate priority was giving them secure VPN connections to the systems they needed. Since then, many organizations have decided to stick with a WFH approach. Two-thirds of the organizations we asked said they’ll be permanently moving all or part of their operations to WFH. That makes securing the working environment a key priority—and a major challenge.
With no way to enforce clean desk policies, or even to know who is looking at an agent’s screen or using their computer, organizations are exposed to new security risks.
Stressed agents, working alone, are much more vulnerable to manipulation or even bribery by fraudsters, and the risk of social engineering and occupational fraud is much higher.
Biometric authentication has a big part to pay in making remote working more secure. With biometrics authenticating customers in the background, there’s no need for agents to see any personal information about customers.
And to prevent unauthorized access to contact center systems and customer data, organizations should use the same biometrics technologies that currently authenticate customers to ensure it’s always the agent who’s using the computer and talking to the customer.
Collaborating to fight fraud
Another fraud prevention measure that’s becoming increasingly critical to handle the massive rise in fraud is sharing data.
In recent years, more organizations have joined fraud data-sharing consortiums. ACFE research shows that 29% of respondents currently contribute to data-sharing consortiums, and 21% don’t currently contribute but are willing to3.
It’s clear that many organizations recognize the value of sharing data to detect and disrupt fraud. But there are still concerns that a lack of transparency, data quality, and common definitions of fraud will lead to genuine customers being flagged as fraudsters.
- Transparency: There’s little value in a “black box” data-sharing platform. Consortium members must know where data has come from and the specific reasons why shared data triggers fraud alerts.
- Data quality: To avoid penalizing genuine customers and creating excessive workloads for fraud prevention teams, a specialist team of fraud experts should oversee the quality of shared data to ensure it’s relevant and relates to verified, prolific fraudsters.
- Clear fraud definitions: If organizations don’t have a common understanding of the criteria for fraud, they can’t trust the alerts triggered by shared data. Consortium members must agree on clear definitions and monitor the platform to ensure data is classified correctly.
So, when you’re comparing data-sharing service providers, choose one that can tell you where the data is coming from, who curates it, and why it was flagged as fraudulent activity. Understanding the sources, governance, and rationale behind the shared data is critical if, for example, you want to use fraud data to help you manage collections activities.
A fresh approach to meet new challenges
Many of the telcos I work with understand that a new approach to fraud prevention is needed to handle new and growing threats. It’s an approach that recognizes the pressure on WFH agents, and finds ways to minimize it. And it’s an approach that recognizes that no organization can fight global criminal networks alone, and puts collaboration at the heart of fraud strategy.
Over the last year, the way we do business has shifted dramatically, making authentication a critical priority. Fraud leaders now have a unique opportunity to get the funding they need, not just to solve urgent problems, but to build fraud prevention capabilities that can protect the business for years to come.
So, as you consider your next technology investments, don’t just look for what you need today—look for tools and platforms that will continue to protect your customers from new fraud threats a decade from now, in every channel.
3ACFE Anti-Fraud Technology Benchmarking Report https://www.acfe.com/technology-benchmarking-report.aspx
Hear how Nuance biometric fraud prevention solutions and telco industry experts fight fraud.