Using Big Data for Fraud Mitigation Strategies in the Banking Sector
Every bank strives for fraud mitigation. Some banks are doing it by using big data both to stop fraud and to predict where it might happen. Big data gathers valuable information across various industries, analyzing billions of small data components and giving banks predictive insights into fraud-prevention strategies.
How fraud mitigation and big data work together
The goal of businesses and IT departments working to fight fraud is to reduce losses. Investing heavily in data, technology and analytics can achieve this goal, but many banks lack the necessary means to do it. Here’s what any banking professional needs to know about using big data to help with fraud mitigation strategies.
1. Banks have been using big data all along
Big data may not be new, but it has become increasingly essential in reducing missed opportunities to avoid fraud. Big data can include unstructured and structured data from sources beyond the credit file. In various ways, technologies have long been used to make decisions based on large amounts of data.
2. Banks need useful information
With the need to provide nearly instantaneous information and decisions for customers, downloading and analyzing big data is not something most banks can do. Rather, banks want to have the information already modeled and cleaned up so that it is immediately useful. Third-party tools that manage large amounts of data, such as the data management tools offered by Equifax, deliver such information.
3. Internal info is not enough
Data gathered from a bank’s customer base is simply not enough to prevent fraud associated with new accounts or account takeover attempts. External data, which provides a view of fraud attempts everywhere, is necessary, as well. Banks need access to outside data assets to develop analytical research, customized models and data attributes.
Having the resources to detect new patterns and provide insight into consumer risk can help any business reduce fraud. The only question is this: How can a business do that if there are massive amounts of data to sort through?
Equifax offers fraud protection and identity intelligence services that leverage big data to answer questions, create preventative measures and utilize both sophisticated analytics and unique technologies to help manage each application and account. Much of the process is automated to provide faster and more consistent decisions.
Data management is another key component to the success of any fraud-mitigation plan. Banks can take advantage of the data management tools offered by Equifax, which help minimize the overall risk.
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