Data, Sponsored

Fighting fraud by better understanding financial data

  • With the rise of open banking, the security of financial data should be top of mind.
  • MX breaks down three keys for keeping customers' data protected.
close

Email a Friend

Fighting fraud by better understanding financial data

Fraudulent transactions in the financial industry have been increasing as consumer behavior continues to shift towards a digital-first mindset. According to a report by PwC’s Global Economic Crime and Fraud Survey 2020, “respondents reported losses of a whopping $42 billion over the past 24 months.”

This is especially worrisome in the age of open banking and open finance. While consumers have come to expect a sophisticated and simple digital experience from their financial apps, the more financial data that is openly shared, the greater the risk of fraud. As fintechs and other organizations continue to increase financial data sharing in order to provide better customer experiences, data security has taken a central role in ensuring that consumers’ information is kept safe all along the digital financial journey.

How understanding financial data helps combat fraud

Consumer financial data is extremely valuable, so needless to say, hackers will not stop. At the same time, financial data sharing is critical for fintechs to compete effectively. With in-person shopping experiences at a decline, and online ecommerce transactions on the rise, fintechs and other organizations need to find a secure way to deliver on their customers’ demands while minimizing risk.

This is exactly where financial data enhancement comes in. What financial data enhancement means in simple terms is a way to understand and make sense of the transactional data flowing into your fintech or organization. The quicker you can understand transactions, the faster you can identify and act on anything that seems out of place. There are three ways to keep consumers' financial data secure: empowering customers with the right tools, making data easily understandable, and selecting vendors with the highest security standards for financial data sharing.

SPONSORED

Empowering customers with the right tools

One way to help reduce fraud is by giving your customers tools that make it easy for them to see what’s going on with their finances. If your customers can’t understand their financial transactions, they’re more likely to miss what could be potential fraud. By enhancing your financial data with a legible and interpretable transaction feed, your customers can tell if any transactions seem suspicious at a glance.

MX can help you augment financial data with categories, merchant logos, and location, so your customers can quickly see where charges were made. If a location or merchant is unrecognizable, your customers can quickly block the transaction from going through, reducing fraudulent charges instantly. Another way to empower your customers is with intelligent, AI-driven insights. By proactively surfacing easily understandable transactions such as subscriptions and recurring charges that might otherwise go unnoticed, your customers can quickly see if anything is out of place.

Make financial data easily understandable

Similarly to powering your customer-facing tools with enhanced financial data, you can do the same with internal tools. With MX Financial Data Enhancement, you can easily analyze spending patterns and purchasing behavior, helping you spot outliers in your customers’ transactional activity. For example, if one of your customers never purchases anything at a certain store, then suddenly has various charges from that location, you can flag that behavior as suspicious and verify it with your customer before charges go through.

Similarly, you can use enhanced financial data to quickly see if your customer had two purchases at two separate locations within a short period of time, and have them verify which purchase is accurate. Not only does enhanced financial data help you limit suspicious activities before allowing them to be processed, but it also reduces support calls, and helps you protect your customers’ proactively.

Work with vendors with high security standards

Lastly, one of the best ways to reduce fraud is by working with trusted partners who have proven and tested security standards. As open finance continues to gain ground, the vetting process will become more critical to the security of financial data.

At MX, not only do we have the most advanced and intelligent financial data enhancement capabilities -- with more field categorizations (from account types, merchant logos, location data, and much more) and highest data cleansing and categorization in the market -- we’re also the preferred partner for more than 200M+ users and 2,000 financial institutions and fintech companies when it comes to our security standards. Our processes and standards have been thoroughly vetted time and time again as we add more relationships to our portfolio. And that’s why many of the top financial institutions and fintechs trust us with their financial data -- because we take security seriously.

0 comments on “Fighting fraud by better understanding financial data”

Outlier OpinionsMakers

Lending, Sponsored

The evolution of Lending as a Service and what it means for business banking

  • Most bankers tend to think of LaaS only in terms of automating borrower applications and onboarding, credit decisioning and loan processing, i.e. loan origination.
  • Today, LaaS is evolving to represent much more than that. Increasingly, LaaS is being leveraged to improve banks’ servicing and portfolio management capabilities as well.
Rapid Finance | February 16, 2023
Sponsored, The Customer Effect

Voice of the Customer: How “active listening” drives meaningful consumer engagement

  • Successful bankers act on feedback from their customers in relation to in-person or digital experiences, as consumers hold the key to improving how financial institutions conduct day-to-day business.
  • Today’s consumers have very little patience for financial institutions that do not place them at the center of the customer journey. Ignoring feedback from critical customer journey key points can drastically impede customer acquisition and retention.
Argo | January 19, 2023
Banking, Sponsored, The Customer Effect

How one bank is successfully building deeper customer relationships through digital customer engagement

  • Despite the gains in convenience and capability that digital channels offer, bankers and their customers are missing the relationship aspect of banking. People still want to connect with people.
  • Banks are now shifting their thinking beyond simple “digital transformation” toward “digital customer engagement” and how to leverage the digital channel to support more meaningful customer interactions.
Agent IQ | January 03, 2023
BNPL, Sponsored

How financial institutions can design a balanced BNPL solution

  • Current BNPL solutions have been better at facilitating the "buy now" part than fulfilling the "pay later" aspect.
  • Financial institutions have access to valuable insights that they can use to better understand consumers and tailor BNPL solutions to their specific needs.
equipifi | December 19, 2022
Data, Sponsored

How marginal improvements in data strategy can yield tremendous results

  • The truth is brutal: data is hard, and most people don’t understand it.
  • Here's how marginal improvements to a company's data strategy can have a profound impact.
Quantalytix | December 14, 2022
More Articles