Digital banking opens new avenues for fraud: here's how to stop It with a platform solution
Though the digital era of banking has come with many exceptional benefits, it has also opened new pathways for bad actors to exploit financial crimes.
Backbase is on a mission to re-architect banking around the customer.
American consumers lost a record-breaking $3.56 billion to online fraud in the first half of 2022. Within the first six months of 2022, Americans reported more than 793,000 fraud complaints and 27% of these complaints reported a financial loss.
However, digital fraud is hardly limited by national borders.
According to the 2022 Global Digital Fraud Trends Report from TransUnion, the global growth of suspected digital fraud was up 52.2% between 2019 to 2021.
Can a digital banking platform help?
The platform era has arrived
The platform era of banking has begun, and it refers to the monumental shift from traditional in-person business models to more digital-centric online banking platforms.
According to a recent market report, the global digital banking platform market was valued at $5.39 billion and is expected to grow to $10.33 billion by 2026.
How can a platform enhance digital fraud prevention?
The increased prevalence of digital banking fraud has pushed banks and credit unions to consider new solutions to meet the security challenges of digital banking.
Luckily, as banking platforms have become more advanced, they have also become more sophisticated in preventing and fighting fraud. Effective digital fraud prevention is designed to keep up with large amounts of transactional data, therefore making it easier for banks and credit unions to help customers spot fraud.
Here are three key ways banking platforms help prevent digital fraud:
- Account aggregation: Banking platforms can offer account aggregation as a service by utilizing open banking APIs. By aggregating your customers’ financial data, they can monitor all of their financial accounts in one place, which simplifies and clarifies the fraud monitoring processes and instances of friendly fraud.
- Data enhancement: Banks and credit unions can use data enhancement tools to gain more accurate business and customer or member insights. Data enhancement is made possible by enabling data collection from multiple sources, including external sources. The process adds more information to a single transaction, which in turn increases the accuracy of quickly identifying and fighting digital fraud. It additionally provides smaller banks and credit unions access to the same data that only larger banks have traditionally held.
- Fraud tool integrations: With integration partnerships and open APIs, banking platforms help banks and credit unions integrate a variety of fraud tools and solutions into one platform. In turn, you can utilize advanced fraud tools all on one platform, with shared data.
Finding a banking platform partner you can trust
The first step in taking advantage of the benefits of a platform to reduce digital fraud is to partner with a reliable platform.
How do you find the right platform partner for you? Look for a provider that truly values the customer or member experience, while also offering services and integrations proven to help you attract and retain more business. Those services should include:
- Account aggregation
- Data enhancement
- Digital onboarding and account opening
- Digital lending for smarter and faster loan origination
- Digital engagement for creating personalized and relevant interactions with clients
- Self-service digital banking
- Digital assistance for delivering top-notch customer or member support
The Backbase Engagement Banking Platform offers all of these features and more. Our platform takes data enhancement a step further through our Digital Engage solution to help banks and credit unions personalize their marketing, offers, and products for clients.
Backbase takes a modernized approach to integrations, offering an open integration architecture that allows financial institutions to connect to their existing systems, as well as third parties like fintechs.
Schedule a call with our team today to find out more about the Backbase Engagement Banking Platform.