In the previous Digital Banking Security tip, I have mentioned about what are needed in order to prepare a nice security cocktail for your bank and Fraud Detection System (FDS) is one of the most critical components of it. FDS is the bottom of a
full glass of water, if it is broken – the water (in our case money!) flows away. For this reason, it deserves a higher level attention.
In simple definition, Fraud Detection System is a software that monitors suspicious activities in Digital Banking and may produce alerts (even block the transaction) if the risk score is high. The risk score is calculated in the light of the predefined variables
(that are called rules) – like the money transfer to an account first time, amount of money or time of the transaction. As fraudsters regularly change tactics, FDS system should be flexible enough to respond these changes too. Also like a car need a driver
(sure driverless cars on the way – literally and metaphorically! but still), FDS needs fraud specialists for management.
This is the short version of the post.
Starting from Tip 2 to Tip 30 only short versions of my posts are available at Finextra. From Tip 31, full (long) versions of my posts can be read here.