The world is not safe anymore. There are a lot of scams out there that can rob you of your assets. This is why it is advised to use the internet as carefully as you can and not to click on any link that may seem suspicious. And it would be a good idea to install antivirus on your system. It is the first thing I did when I subscribed to Spectrum online. As the world keeps progressing, financial fraud methods have become more sophisticated than ever before. It is high time for people to start using advanced techniques to fight off such attacks. Financial institutions have been doing their part in investing their resources to not just combat but also prevent financial fraud. However, the nature of these fraudulent attacks keeps on evolving. This paradigm needs to change soon.
Big Data is the Answer
Big Data is one tool that appears to be a promising weapon that can help you detect fraud. It uses preventive techniques such as real-time detection and behavioral analysis to give fraud-fighting a new perspective. The analytics would give financial institutions a deeper insight into suspicious activities. It will allow them to spot unusual transactions which will help to prevent fraud.
The Extent of Financial Frauds
A well-known information service organization Experian did a survey on financial frauds and what they found was pretty chilling, to say the least. Here are some of the company’s findings.
Identity theft has increased at a rapid rate
Third parties were often involved in fraud related to saving products, loans, and cards.
Mortgage application frauds have skyrocketed in recent years.
There has been a surge in current account application fraud.
Considering how different types of financial fraud are ruining people’s lives, it is recommended for everyone to be extremely careful when it comes to dealing with their assets.
Fraudsters Are Getting Smart
There are a lot of fraudsters in the world who are increasingly using much quicker, faster and creative ways to steal both data and identity. You will have to accept that these malicious individuals will continue to use innovative ways to attack you. This is actually the first step to fighting financial fraud.
There is a popular phishing attack that took place a few years ago. The attack was executed in different steps. First, the scammers did a reconnaissance of the executives who dealt with bank accounts, wire transfers, and large payments. They would then spoof top executives and obtain their email addresses. Keep in mind that these individuals were those with great financial decision-making powers. The attackers would then shoot emails from the executives account to those people who dealt in large payments, asking them to transfer the funds to the attackers’ account.
This just shows how smart these attackers are and they can go to almost any lengths to execute their frauds perfectly.
How Can Big Data Help?
Big Data can help you detect frauds and here is how
1. Identifies Suspicious Activities Before the Damage Is Done
Banks are always looking for unusual activities represented by data in real-time. For instance, whenever a credit card user performs a transaction for the first time from a device, it will send a notification to the bank. However, if a lot of transactions are made from various devices during the day, then this will alert the bank thanks to the data generated and they will instantly contact the credit card holder or may even go a step further and block online transactions.
2. Leverages Data to Spot Unusual Activities
Banks usually gather their customer data from various sources such as logs, social media, and call center conversations. This data collected can be helpful to them in noticing any suspicious activities. For instance, when a credit card holder is flying to his destination and he/she posts it on Facebook, then any transaction during that period is unusual and the bank can quite simply block the transaction.
3. Detects Fraud Attempts
Let’s take a look at the insurance industry that not only takes fraudulent claims but also approves some. So, how can big data help them? Well, the insurance industry can extract data from different sources such as past claim records, social media, phone records, and criminal records. Whenever a claim is received, the insurer should scrutinize the information and if anything suspicious comes up then it shall be further investigated.
Big Data is quite useful for financial companies and banks as it gives them the opportunity to identify and prevent fraud from happening. However, it should be noted that the use of big data for this particular purpose is still in its initial stage and a lot has to be done in order to make it work perfectly. But there is no doubt that it can make the financial future much more secure.