Banks Can Dramatically Boost Fraud Detection Through Better Collaboration, According to LexisNexis Research.
BANKING AND CREDIT NEWS-November 22, 2024-Banks Can Dramatically Boost Fraud Detection Through Better Collaboration, According to LexisNexis Research(C)2024 M2 COMMUNICATIONS https://www.m2.co.uk
Banks and online retailers can improve their ability to capture hard-to-detect high-risk fraudulent transactions through combining shared fraud intelligence into their risk assessments, according to the latest Global State of Fraud and Identity Report from LexisNexis Risk Solutions.
Examples include a US bank that boosted its ability to detect high-risk events by 17 times or 1700% through combining email address risk with broader digital identity signals, such as device intelligence and IP address.
Similarly, a top US card issuer combined digital identity, email and physical data, such as postal address, to boost high-risk transaction detection by a factor of 23.
Currently, only around one in four or 27%1 of financial services and online retailers in the EMEA region employ consortia or risk insights exchange initiatives as part of their fraud prevention technology.
A shared collaborative network enables organizations to flag suspicious activity relating to device, IP address, email address and others, to help all members improve their fraud risk assessments.
For instance, a device displaying negative behaviors poses a five-times greater risk of subsequent fraud compared to baseline, analysis shows. If anti-fraud solutions flag a device and email address relating to a single identity, the fraud risk is eight times2 greater than baseline.
Trusted customers also benefit from these shared networks, since member organizations can flag trusted devices to boost recognition of genuine customers, speeding up login and transaction time.
Such improvements in fraud detection can also result in significant savings for organizations.
Metro Bank, a top 10 UK bank, uncovered over GBP 2.5m of fraudulent payments within six months -- marking a 105% improvement using a collaborative risk insights model to spot outgoing proceeds-of-fraud payments to mule accounts.
The model also later found one in eight of the accounts flagged during the period to be mule accounts, helping to protect the bank from the risk of additional fraud losses and regulatory fines.
Another major UK bank increased the value of its fraud detection by GBP 1.7m in just one month by analyzing collaborative email intelligence, including email address age, domain and composition.
Newer email addresses and ones used to create accounts in a cryptocurrency marketplace within the past month were also found to carry much higher risk than others, according to the analysis.
The Global State of Fraud and Identity Report draws from both the underlying datasets of the LexisNexis True Cost of Fraud Study and the LexisNexis Risk Solutions Cybercrime Report 2023.
LexisNexis Risk Solutions harnesses the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses across multiple industries and governmental entities reduce risk and improve decisions to benefit people around the globe.
Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of UK-based RELX (LSE: REL) (NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers.
((Comments on this story may be sent to [email protected]))
 Printer friendly
 Cite/link
 Email
 Feedback
| |
| Publication: | M2 Banking & Credit News (BCN) |
|---|---|
| Date: | Nov 22, 2024 |
| Words: | 506 |
| Previous Article: | New Open Finance Guidelines Aim to Spur Financial Inclusion. |
| Next Article: | Short-Lived Mortgage Rate Relief Boosted September Affordability, According to Zillow Data. |
| Topics: | |