Criminals have never had more avenues through which to defraud people. This has been fueled by the proliferation of technology ranging from instant messaging to new forms of remittance, like P2P and real-time payments. That’s why ComplyAdvantage launched Fraud Detection, its new solution that uses machine learning algorithms to detect and prevent the menace of transaction-related fraud.
“Fraudsters are fast and creative, always looking for new vulnerabilities they can exploit. That’s why fraud is one of the most commonly experienced crimes affecting people every day, causing billions in losses to consumers and businesses,” says Oliver Furniss, CPO for ComplyAdvantage. “Banks and other financial institutions are constantly playing catch-up. Fraud Detection gives them an effective new way to monitor the millions of transactions they process every day and stop criminal activity in its tracks.”
Catching all major payment fraud scenarios
Fraud Detection identifies over 50 of the most prevalent payment fraud scenarios faced by banks and other financial institutions through the millions of transactions they process every day. The product detects and flags fraud typologies including Account Take Over (ATO), Authorized Push Payment Fraud (APP), Synthetic Identity, and Relationship Fraud.
Fraud Detection’s advanced capabilities can also identify “unknown unknowns,” such as fraud typologies that do not match current rule-based scenarios.
When businesses receive an alert to suspicious activity, it comes with a full explanation, streamlining the transaction’s resolution. For example, a transaction could have been flagged because it followed a failed password attempt or because it was at a time of day that wasn’t in keeping with the customer’s location. This feature sets Fraud Detection by ComplyAdvantage apart in the marketplace.
Holvi, the digital banking service for small businesses, uses Fraud Detection as part of a holistic approach to financial crime risk detection with ComplyAdvantage.
“The convenience of digital banking benefits customers and criminals alike. Technology is developing fast, but so are fraudsters. That’s why selecting Fraud Detection by ComplyAdvantage was a very easy decision for us. We immediately saw that it had the latest machine learning technology and knew that the implementation would be extremely smooth,” said Valentina Butera, Head of AML and AFC Operations at Holvi.
Fighting crime using AI and ML
Fraud Detection uses AI and machine learning algorithms to monitor monetary and non-monetary events and look for patterns that indicate possible risks. This includes identity clustering, using behavioral and personal characteristics to identify accounts that are, for example, controlled by a single individual.
It also combines financial and non-financial events with natural language processing and machine learning, meaning factors such as location and time can be used to identify suspicious transactions in real time.
“Integrity is key to a functioning, successful financial system. Institutions need to know that the transactions they facilitate are legal,” continued Furniss. “Our Fraud Detection solution helps payment providers, banks, and other institutions provide a strong first line of defense, protecting their customers and alleviating the stress and loss criminals cause.”