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January 20, 2021 - Chandreyee Chakravarty

Top Factors Financial Institutions Consider When Selecting Fraud Detection Solutions

For all the benefits created by a digital transformation in financial institutions (FIs), it’s also created more complexities in fighting fraud. 

FIs have responded to consumers’ demands for easier banking and transactions to the point where the majority of activities can be conducted remotely. This same convenience and ease of doing business are being exploited by fraudsters around the world. What’s more, the speed of digital technology has enabled cybercrimes to be executed on a much larger scale. 

The global pandemic has only made financial fraud more widespread and complicated. A recent report from the Association of Certified Fraud Examiners (ACFE) notes that 77% of respondents have seen a significant uptick in fraud. In addition, 92% of fraud experts believe this trend is likely to continue for at least the next 12 months. 

Is your financial institution prepared to defend against the increase in fraud activities coming from all sides? Here’s what FIs are considering when selecting fraud detection and prevention tools.

Understand How Fraud Prevention Tools Support Strategic Business Initiatives

Financial fraud takes many forms, including account takeovers, transaction fraud, application fraud, and money laundering. What’s more, fraudulent attacks are evolving at an alarming rate and are being conducted on a large scale. 

Fraud prevention tools must not only be able to offer a multi-layered defense across all channels and types of fraud, but also evolve as new threats emerge. By changing with the fraud landscape, tools can remain relevant and effective over time without the need for extensive data training and retuning.

Identify the Hidden Costs of Fraud Detection Tools

Deploying a new fraud detection platform costs more than just the upfront purchase. Things like ongoing licensing, user onboarding and training, and time to value can all impact the total cost of ownership as well as ROI. For fraud models that need constant retraining, you’ll also need to factor this into your investment.

Costs will vary depending on how you plan to deploy your fraud platform. For example, an on-premise platform will see costs associated with hardware, server maintenance, and physical storage, while a cloud-based deployment can reduce your overhead. 

Anticipate the Necessary Resources for Deployment

A successful fraud prevention platform begins with a successful deployment. This requires multiple internal and external resources, including the initial purchase, user setup and training, physical infrastructure, data scientists and fraud teams, and vendor support. Understanding these upfront costs as well as ensuring these resources are available at the right time can create a strong foundation for success.

How Financial Institutions Should Evaluate Fraud Prevention Tools

As financial fraud rates increase, so must FIs’ efforts to protect their customers and business interests. Setting the right criteria for selecting a fraud prevention tool is the first step. Download our ebook, Essential Guide to Machine Learning for Financial Institutions, to discover what to look for in proactive fraud protection.

about Chandreyee Chakravarty
Chandreyee is the Regional Head of Sales at Datavisor. She has held high-profile sales positions within the Identity Management and AI space over the last 20 years globally.
about Chandreyee Chakravarty
Chandreyee is the Regional Head of Sales at Datavisor. She has held high-profile sales positions within the Identity Management and AI space over the last 20 years globally.