Real-Time Fraud Detection vs. Batch Analysis Fraud Detection in Banking

In the last decade, technology has made accessing finances easier than ever. Today, bank customers and credit union members can deposit checks online or with their phone, instantly transfer money with the click of a button, and get access to cash without ever stepping foot in a financial institution.

But with instant banking now at our fingertips, it’s becoming increasingly difficult for banks and credit unions to detect bank fraud; while conversely, it’s become far easier for fraudsters to commit financial crimes.

As a result, the real cost of bank fraud and the prevalence of it, is on the rise.

However, with the ToolCASE fraud detection software AI suite, institutions can now protect member/customer assets, seamlessly and frictionless, while still offering the convenience of mobile and p2p banking.

What Is Real-Time AI Fraud Detection in Banking?

Protecting your customers or members from fraud can’t happen after the fact. Real-time fraud detection using artificial intelligence is innovative and highly effective at detecting and halting frauds live. ToolCASE AI analyzes thousands of transactions and data points from a near unlimited number of sources to understand fraud trends and can recognize even the smallest of fraudulent activities as they’re happening.

With 24/7 surveillance, ToolCASE’s RembrandtAi notifies risk and fraud teams immediately of potential fraud as its occurring. This allows banks and credit unions to take immediate action, potentially stopping the crime before it’s too late.

Better yet, RembrandtAi can be fully automated, so risk and fraud teams have a full drag net at their disposal, even during off hours and holidays, or any time the fraud team is not capable of active monitoring or investigating.

Real-time fraud detection, powered by artificial intelligence, benefits various industries including banking, financial services, retail, airlines, government, the oil and gas industry, and insurance, to name a few.

Why Is Real-Time Fraud Detection So Important?

By next year, the Federal Reserve has plans to implement its FedNow instant payments system that will change all banking as we know it, and greatly complicate fraud detection. With FedNow, deposited or transferred funds will be immediately available for withdrawal.

While this is incredibly convenient for consumers and business owners, it will drastically reduce the amount of time risk and fraud teams have to review transactions. FedNow will make having high-quality, innovative fraud prevention software critical. Theoretically, with instant clearing, someone could deposit a fake check either in person or online and immediately withdraw the funds, leaving the financial institution on the hook for the losses.

It is critical for institutions to implement ToolCASE AI fraud detection software, powered by RembrandtAi, so that financial crimes can be stopped in real-time before funds are transferred.

Problems With Batch Analysis Fraud Detection

Currently, most fraud systems operate using batch analysis fraud detection. These programs gather data and flag risky activity for batch analysis review at a later time. While this may still be somewhat effective in a few cases, real-time banking means most fraud detected in batch data will have already occurred, and funds already transferred by the time the activity is detected.

With real-time fraud detection software, fraud teams can take instant action to stop financial theft.

Simply put, while batch data analysis for fraud detection may still work at some level, it won’t work for long.

Common Types of Online Banking Fraud

Accessing banking information from the palms of our hands opens up opportunities for all types of fraud. Here are just a few of the common types of online frauds that AI fraud detection software can help financial institutions to reduce fraud costs.

Phishing and Smishing

Phishing occurs when fraudsters send scam emails to victims, impersonating their financial institution. Smishing occurs, similarly, though via text message. Customers will hand over sensitive information like personal data, providing fraudsters access to their accounts.

Malware Attacks

Malware attacks are another type of fraud that can occur over email. When the victim opens a fraudulent email and clicks on the included link or attachment, it can install software that records personal information, or PII, allowing the fraudster access to bank accounts and other sensitive information.

Fraudulent Deposits and Withdrawals

After FedNow is implemented, fraudsters will be able to deposit fake checks, for example, into new accounts and immediately withdraw money, rendering batch fraud detection virtually useless. This applies to both in person deposits and mobile deposits. However, a large portion of new account fraud occurs with online banking.

Protect Your Assets and Those of Your Customers or Members With ToolCASE’s Innovative RembrandtAi Fraud Detection Software

Fraudsters are constantly on the lookout for new ways to exploit victims financially. With ToolCASE fraud detection software, powered by RembrandtAi, institutions can monitor their customers’ accounts 24/7, detect and stop fraudulent activity while it’s occurring. Something that cannot be done with batch data analysis.

Consider implementing RembrandtAi fraud detection software with your institution’s risk and fraud teams, today. There is no better way to protect you and your customers’ or members’ assets.

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