raudsters get help from hackers. There is a larger dark web working harder than us to cheat us. The moment we are connected to net via our mobile, there are many eyes looking at us to break into our system. Is it frightening? Yes, it should be.

How many times your banks alerted you of a potential risk and you followed the steps advised by them?

Most people ignore the alert messages that are based on Fraud and Risk Management systems of financial institutions. Reason is that they think that it is happening to someone else and they are fully shielded. When you install an app, do you know what data it takes from your mobile?

A few years back, a lot of news came on Mark Zuckerbug covering his laptop webcam. One such url is here. Hackers try to get access to every possible vulnerable target, high worth or low worth. Stolen information has a dollar value in the dark web. Using that information, fraudsters and hackers create more issues.

Top reasons for hacking and doing fraud are money, thrill, sex and blackmailing.
Image by Pete Linforth from Pixabay

Every bank tries to have fraud and risk management systems (FRM) in place. But look at the spread. Many banks, many channels to operate, many payment gateways, many electronic switches and hubs..Just one weak spot, bingo, the hackers are there! Nowadays, the frauds are not usually originated by humans; BOTs are right here to initiate fraudulent or suspicious activities. These may be just to distract you. 100 times fraudster distracts you, 100 times you shielded, you get a high of it, 101st time he tries and you are slightly lethargic...it is gone. A standard technique that fraudsters try all the times.

FRM systems have rules defined based on prior frauds. But today AI and ML play a major role to detect suspicious transactions. When dealing with millions of transactions, SQL queries and human rules cannot detect one needle out of the hay stack. So application of ML and AI is a must now on any FRM system.

Everyday you become stronger and wiser, the fraudster also gets stronger and wiser. So FRM is not a one time task.

Anti fraud mechanism does not stop with just systems. A lot of business process controls should also be in place and verified, every time. A simple audit once in 3 months is not at all sufficient. But most of the organizations have not come out of the once in 6 months audit hangover!

Every application, every transaction must go thru a systematic verification to mark as fraud or non-fraud.

Now, with IoTs coming in a big way, exposure to the external world is wide opened. With this abundance in data and connectivity, we need to swim against the stream to stay afloat.

Take care.

Title Image by teguhjati pras from Pixabay

Nov 9, 2019

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