SEPTEMBER 2019CIOAPPLICATIONS.COM9implement. FSIs, in over eagerness to capitalize on the Fintech boom, tend to risk sidestepping when it comes to compliance. This often results in a higher chance of being attacked.Embrace digital opportunities, manage risksIt is unsurprising FSIs have rigorous protocols and processes in place to reduce fraud as they handle some of the most sensitive information. Yet, customers today are used to getting what they want, wherever they are, and whenever they want.The question now lies in balancing security, digital risk, and convenience. Delivering frictionless customer experience across new and emerging digital channels, like mobile banking, while ensuring the maximum level of security is key for FSIs to sustain their competitive edge. How does an ideal authentication and fraud detection strategy look like?Stopping fraud, not customersAs the array of digital banking channels grows, there is an increasing need for FSIs to implement authentication processes that ensure transactions are legitimate--yet at the same time, reducing the tedious additional authentication hoops. Customers today want access and availability with zero friction.Risk-based authentication assesses fraud risk based on contextual information such as device identification, IP address, user behavior, and fraud intelligence on a massive scale and across all customer engagement channels. What it does is to leverage multiple machine learning models that enable new fraud patterns to be learned quickly. The result ­ minimized false positives and a more seamless end-user experience.Secure omni-channel architectureDigital banking also sees online and mobile banking, chat support, and third-party services running independently from one another. Such environments may translate to inefficient operations as potential fraud is buried in a myriad of disparate systems, leading to a less secure and disparate banking ecosystem.With an omni-channel architecture, all channels--from offline to online--can share knowledge and awareness of customers' interaction. This leads to streamlined operations, and greater visibility and awareness for security teams, allowing for more secure banking and better user experience. More importantly, it creates an environment conducive for FSIs to leverage advanced technologies such as deep entity profiling to further improve fraud detection.Keeping pace with transaction growthIt is inevitable that the volume of digital transactions will spike with the meteoric take-up of digital banking. However, this makes fraud analysts' job to review potential fraud cases extremely challenging. Automating the fraud review process to prioritize case alerts based on risk and business impact--business-driven security--will help direct cases that pose the most risk to the limited resources FSIs have at hand.Machine learning can also play its hand here. Implementing automated case handling will further enhance the accuracy of fraud detection without even engaging analysts, in turn freeing up time for analysts to focus on more critical tasks--this two-pronged approach will ultimately cut fraud losses.Fintech is well on its way to growing its presence across APAC.Digitization is set to connect and democratize the region's unbanked population--and this is where a great opportunity lies for FSIs. For them to capture the growth opportunities this presents, FSIs must learn to balance a seamless banking experience and a secure one. This will ultimately build trust--trust is, after all, the real currency in the FSI sector--that ensures happier customers in years to come.
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