Going through the ordeal of having had your bank details cliftied with a trail of unauthorized transactions on the account is enough to send you spiraling into an endless hole of panic and stress. Falling into the clutches of identity thieves and fraudsters is not an uncommon occurrence; in just 2019, there were more than 270,000 credit card frauds and 650,527 reported cases of identity theft in the United States alone.
This year, the COVID-19 pandemic has sparked off a massive wave of epoch-making upheaval in human behavior, business paradigm, and various statistical patterns. This has opened the door to new opportunities and exploitable vulnerabilities for fraudsters and identity thieves, with these culprits tweaking their techniques to maintain their lives of criminality.
That being said, the banking industry has been taking a revolutionary approach that involves the adoption of cutting-edge technologies to fend off and intercept such crimes. It has set itself apart from many other industries as the forerunner of one of today’s most technologically-advanced sectors. Below are some of the innovative solutions that are on the rise in the banking industry.
Identification and Verification through Biometric Technologies
Traditionally, people would go to their banks they preferred to make a transaction, withdraw money, and even seek financial assistance. They would be interacting with friendly staff in a brick and mortar setting as they were attended to. With the ongoing rise of online banking, these practices have gradually been phased out; we can now get all these done with just a few clicks and taps on the computer or mobile device.
When it comes to online banking, one of the many concerns that people come up against is the security of their personal data and money. However, there has been a widespread deployment of biometric technologies in the banking industry to improve existing identity verification solutions.
If you go onto your mobile device right now, bring up the banking application, and attempt to log into your account, you will likely be asked for a secondary form of identification, being a biometric one, besides the password that you enter. Other banking institutions may only use biometric data as the primary authentication factor. Biometric data can take several forms, such as fingerprints, faces, and even voices. It is widely viewed that biometrics are safer than passwords as they are more difficult to crack than passwords.
Utilizing The State of Art Surveillance and Security Systems
Surveillance and security systems have become smarter than ever, with continual advancements in the technology of the internet of things (IoT) and computer vision. Banks across the globe have now vamped up their security systems, utilizing a combination of advanced, IoT-enabled surveillance cameras and sensors to enable remote monitoring in a bit to foil criminal activities at the premises.
In the past, banking institutions would opt for standalone closed-circuit television systems (CCTVs) with security guards to safeguard their branches. This practice has become obsolete, and smart ATMs are appearing everywhere, switching places with traditional ones. In India, such technology has gone to the extent that several IoT-capable ATMs are fitted with sensors capable of detecting any tampering attack on the machines. Speaking of smart ATMs, advanced surveillance systems are also placed in these ATMs that can help catch sight of any activity that may be illegal and at the same time, alert the authorities.
Integration of Artificial Intelligence into Fraud Detection Algorithms
Phishing scams, fraudulent transactions, and anomalous transactions are some of the terms that have grown familiar to our ears. We often get emails from our banks that warn us of the presence of a new phishing scam; however, this has yet deterred cybercriminals from making their moves.
It is a common practice that cybercriminals steal bank accounts, personal identities, and even credit card details using different techniques to perform fraudulent transactions, swindling millions and millions of dollars from the victims’ accounts. In 2019, consumers reported having lost more than $1.9 billion in relation to fraudulent transactions.
Time is of the essence when it comes to stopping fraudulent transactions. These transactions have to be stopped before the stolen money literally goes into the pocket of the criminals, otherwise recovering the funds becomes extremely difficult.
Many banks are utilizing machine learning models that help track down iffy transactions that may be illegal. This happens in near real-time, stopping any transaction that seems suspicious as the system alerts the authorities. Other than stopping fraudulent transactions, such an implementation of AI technology is also superior in pinpointing anomalous transactions. Anomalous transactions are ones that differ from regular transactions, and these are sometimes difficult to notice by human eyes.
Cybercriminals are constantly on the lookout for new opportunities to lay hands-on personal data so as to gain financial rewards illegally. Although the current use of technologically-advanced solutions cannot fully wipe out cybercrimes, it has certainly played a big part in contributing to the prevention of these crimes globally, from identity thefts to financial frauds. This challenge ensures the continuous evolution of the banking industry, making the sector one of the digital leaders of the future.