How Can Data Enrichment Protect Companies from Online Fraud?
Posted by Mark
from the Business category at
14 Aug 2024 01:15:23 pm.
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Before addressing combating fraud, it is essential to agree on the definition of fraud: a deliberate action aimed at deceiving or defrauding a person or entity to obtain illegal benefits, generally on account of others. Many frauds can be grouped into seven types: financial, commercial, identity, documentary, social, IT, and online. The fight against fraud is about all the actions, data enrichment, and other measures that public authorities and private companies use to prevent fraudulent acts. In a constantly changing digital world, new forms of fraud appear regularly.
Data Enrichment to Fighting Fraud
Annually, 3 out of 5 companies see an increase in fraud attempts, of which 3 out of 4 are phishing attacks. Also, 1 in 4 companies fell victim to proven fraud. The government is responsible for implementing anti-fraud policies and measures. Their role is to detect, but also to prevent, and sanction different fraudulent acts. Different independent bodies are responsible for solving issues in different sectors. Anti-fraud companies can also help by using data enrichment to help businesses avoid scams by making available an entire list of contacts to help them identify if those who contact them are a possible threat.
Companies must find all the measures to protect their operations. They must also apply internal safeguards to protect them and their customers from malicious acts. That means companies must search for anti-fraud specialists who can give them advanced solutions to detect fraudulent schemes. An alliance between artificial intelligence and human expertise could help, too. Many companies are dedicated to offering solutions to fraud. They provide advice and support to raise awareness regarding all the risks associated with fraud. There are plenty of solutions for companies to combat fraud.
How Do Banks Fight Fraud?
To combat fraud, money laundering, and terrorist financing, banks must implement a risk management and compliance strategy. In this process, banks are legally obliged to:
- know their customers (KYC process)
- to identify their transactions (KYT or the Know Your Transaction process).
- Implementation of advanced security systems;
- Strengthening authentication protocols;
- Continuous monitoring of transactions;
- Collaboration with the relevant authorities;
- Awareness and training.
Investments in technologies that offer identity verification solutions through facial recognition with active or passive live detection are a must. These tools are generally used when the bank engages with its customers (e.g., when a bank account is opened) to comply with KYC obligations. These methods are a good solution to eliminate the risk of identity theft. In such situations, data enrichment can be a helpful tool. Implementing multiple levels of authentication to ensure that only authorized individuals can access an account or perform sensitive operations is necessary.
These measures, known as strong authentication, often include using complex passwords, double authentication (for example, password + email validation or receiving a code via SMS), and notifications in the event of a suspicious connection from an unknown device. Banks use different tools to monitor real-time transactions to comply with all these. That way, they will see if something is happening and if there is any risk of fraudulent behavior. Companies must understand that their relationship with law enforcement is essential because they must cooperate in fraud investigations. This collaboration will successfully help eliminate fraudulent activities.
Contact Experts to Help Your Business
Businesses should regularly provide training courses for their staff to inform them of new fraud techniques, such as data enrichment, and the steps they must take to identify and report suspicious cases. It would also help any company educate its customers by offering ideas on how to protect their sensitive data. The best thing any business can do to be safe is to contact experts and see what measures they must take to stay safe. Fraud doesn't just affect financial companies; it affects everyone and evolves at the same pace as new technologies!
Whether you are a small or a big company, it is essential to implement preventive and curative measures. Eliminating the conflicts of interest of the control bodies is the primary way to facilitate the concrete functioning of the control systems. But what are the potential risk factors at the level of a company?
- The growing complexity of organizations;
- Reduced diffusion of control functions;
- Acceptance by companies of a certain level of risk as a typical element of business;
- An internal control system that only partially corresponds to the economic requirements of companies is needed.
Along with normative interventions, special attention must be paid to organizations' data enrichment and internal regulation initiatives. Practically, the creation, application, and promotion of measures such as:
- Internally developing ethics and compliance departments and management systems by those with experience in the field must be independent of executive management.
- To develop ethics and professional conduct policies, valid for all employees (including management) and available on the company's website, which include:
- Anti-corruption policy;
- Sponsorship policy;
- Event organization policy
- Gift-giving/receiving policy;
- Conflict of interest avoidance policy.
- To implement reporting channels and encourage employees/collaborators to report any suspicious elements,
- To promote an effective control system based on the principle of the four eyes within the norms and operational procedures, ensuring the exercise of activities in a fair, honorable, and appropriate way,
- To carry out due diligence activities before entering into a business relationship with another organization,
- To organize periodic assessments of the risks of fraud and corruption, followed by formulating a new strategy to reduce them or adapting the old strategy according to the latest results; these assessments can be carried out through short interviews and questionnaires.
Tags: data enrichment
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