Enterprise-wide fraud management: Four success factors that banks need to consider

Banks have an urgent need to find a better way to combat fraud.

The introduction of products, services and distribution channels along with digital transformation creates new vulnerabilities making fraud risk greater than ever before.

Banks have traditionally approached addressing fraud by handling credit card, check, Internet, application and other fraud and financial crimes all as separate groups. This siloed approach makes combating increasing fraud risk extremely difficult as these type of fraud defences are unable to detect schemes that attack across banking channels, accounts, and products.

Leading banks are actively pursuing more holistic solutions that address all types of financial crime (including money laundering) through a single platform. This approach provides an enterprise view of fraud independent of product, channel or geography. It also makes economic sense as it reduces data storage costs, increases reuse, and decreases the incremental cost associated with adding new products, services, and channels. From our experience, enterprise-wide fraud management can be challenging and getting these four factors “right” greatly increases banks’ success with its implementation.

Getting the data right – Geographic expansion, acquisitions, and organisational silos make the task of gathering and formatting data from disparate repositories quite complex. Whether using existing data integration platforms or third-party applications, organisations need the ability to access, extract, cleanse, aggregate, load, and manage data so that a complete model is available for analysis.

Migrating one solution at a time – For years banks have focused on “point solutions” to address fraud risks associated with specific products, services, and channels. They must also protect against cyber crime and comply with Anti-Money Laundering and Know Your Customer regulations, which vary by country. While an enterprise-wide fraud management solution is the goal, it can be reached with far less complexity by migrating one point solution at a time instead of attempting to migrate all solutions at once.

Taking advantage of advanced scoring – The high incident rate for false positives (cases identified as fraud when they are not) increases cost and sabotages the bank’s efforts to expand customer relationships and increase holdings. An advanced scoring engine uses scoring of individual customers and their full histories, scoring of associated networks including behavioural data, and application scoring based on score-card-driven models and text analysis.

Future proofing – As new threats are constantly emerging, banks need to future-proof their fraud systems to adapt to unforeseen changes in business requirements. Advanced enterprise solutions future-proof through several methods including capturing investigation outcomes automatically and reusing those outcomes in future scoring. They also apply automated risk scoring against known fraudulent networks to prevent criminals from masking their previous identities and repeatedly opening accounts.

The use of a single enterprise fraud management platform is quickly becoming a reality in many banks, but the journey is not straightforward. By considering these factors and enlisting the help of partners with experience in banking, fraud detection, and specific fraud solutions, banks can improve their return on investment and results in this complex fraud environment.


Eric Reich is Business Information Management Practice Head, Continental Europe and Philippe Keraël is Insurance & Banking Analytics Solutions Head, Continental Europe, Capgemini Financial Services.

Email us at FSbigdata@capgemini.com
Visit us at www.capgemini.com/banking
Call us on +44 (0)2032023323



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