Five Great Tech Practices to Reduce Fraud RiskBy Juan Carlos González | Fri, 02/11/2022 - 13:00
With the increase in digital channels and online activity, digital fraud has risen in Latin America. The 2021 Global Identity Fraud Report revealed that four out of 10 financial frauds are carried out through digital channels in the US and Latin America.
In Mexico, the number of lawsuits for financial and banking fraud increased by 52 percent during the past year, according to the National Committee for the Protection and Defense of Users of Financial Services (CONDUSEF). The institution fielded more than 76,000 lawsuits for possible financial fraud.
These financial frauds range from unacknowledged wire transfers that originated from deceptive phone calls, to theft of sensitive data and user identity.
Due to these situations, financial institutions have tried to protect their users by warning them about these practices through campaigns and by implementing technological strategies that provide users with other methods of security. Methods such as physical biometrics, PIN codes, and digital identity validation are now a necessity for companies.
Using robust technology platforms to make customer experience more secure is now more important than ever. It is proven that organizations that invest in digital experience and fraud prevention retain their users and obtain better results than those who don’t.
The financial industry has proven to be a leader in terms of technological innovation and the implementation of digital processes that favor user security. Here are the five technology practices that are helping reduce the risk of fraud in the business sector.
- Digitize documents: The exchange and dealing of documents are among the most sensitive processes for fraud in a company, as the forging of documents, theft of important data and even of identity can happen. Digitization reduces these risks and there are platforms such as Expediente Azul that collect and integrate documents digitally and securely, reducing errors by 30 percent in documents sent by customers.
- Automate processes: Automatization speeds up, ensures and increases productivity internally while generating certainty. The automation of connection processes, with the Credit and Legal Bureau for example, security locks, such as digital and electronic signatures, as well as identity validation and risk analysis streamline processes by up to 200 percent.
- Store in a single platform: This storage method benefits companies and users as they both have access to information safely and immediately. There is already a variety of software with cloud services that allow companies and users to monitor the achievement of their processes remotely and in real time. This provides a sense of tranquility since all the data is encrypted and backed up in virtual space outside the organization. Furthermore, it allows the incorporation of multiple users, executives and clients to have access to their information online simultaneously.
- Use identity recognition tools: Combining different security methods is recommended as it helps to scale the digital experience and increase customer confidence. Digital identity validation is essential to prevent fraud and identity forgery. In this case, a proof of life, a practice more popular every day to reduce impersonation, is one that has benefited the most from digitization as it requires a photo, video, audio or biometrics match.
- Implement micro processes and agile software: Most companies believe that implementing high-technology systems for their company requires robust programs and consequently high costs. In fact, it is about implementing micro processes and recurring to several systems that impact different areas simultaneously in the company. For this reason, it is actually affordable.
These five practices give companies the opportunity to adopt a new security approach for themselves, their clients and their users. In addition, it's a chance for them to build trust while contributing to reversing the numbers of digital fraud that have become so common in business today.