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

Sponsored

How B2B fintech lenders can sharpen their analytics with external data to increase qualified leads

  • Many fintechs are addressing niche market segments with innovative solutions, like SMBs, which come with unique challenges.
  • In the second of this article series, we discuss how the data can be leveraged in generating leads and accelerating the sales pipeline.
Explorium | January 18, 2022
Blockchain and Crypto, Sponsored

Navigating cryptocurrency: Three areas of focus for financial institutions

  • Understanding what’s out there is a critical step to identifying how your financial institution fits into this emerging environment.
  • Education and awareness are key moving into 2022, especially in three key areas.
Fiserv | January 12, 2022
Sponsored, The Customer Effect

The increasing role of personalization in retail wealth management

  • In a recent survey by ThoughtLab and Publicis Sapient, 49% of investors put simple, intuitive digital experience as top priority – but only 18% are very satisfied with their current advisor’s digital experience.
  • With 44% of respondents planning to move their funds over the next 2 years, better personalization has never been more important.
Publicis Sapient | January 06, 2022
Blockchain and Crypto, Sponsored

Navigating cryptocurrency: Building on consumer trust with innovative technology

  • The significant market capitalization of cryptocurrency and its growing popularity are creating a strong movement to incorporate cryptocurrency into payments, investments and banking capabilities
  • As mainstream curiosity and interest in cryptocurrency increases, more companies are facing strategic decisions around how to accommodate the use and consumer demand of the new currencies
Fiserv | January 05, 2022
Blockchain and Crypto, Sponsored

Navigating cryptocurrency: Understanding the market and demand

  • Consumers are clearly interested in holding cryptocurrency, and evidence shows they’re particularly interested in holding it with their trusted financial institution
  • Providing cryptocurrency solutions can be a valuable tool for attracting consumers and gives financial institutions the tools to grow noninterest income
Fiserv | December 15, 2021
More Articles