Scams continue to proliferate and widespread losses from victims are driving new reimbursement regulations to protect consumers. Among the challenges are rising Authorised Push Payment (APP) fraud and increasing customer expectations to be protected. UK regulators are paving the way by mandating that all APP scam victims will be reimbursed from October 2024.
While legislation is being finalised, banks must work cross-functionally across their organisation to ensure that their fraud prevention processes are working well for them. For example, fraud signal orchestration and consumer intervention processes need to be as streamlined as possible. There is an additional need to identify and mitigate mules as well as identify fraud risk on inbound payments.
When it comes to customer interventions, if consumers are accustomed to fast payments rails, false positives can negatively affect customer service when transactions cannot be completed, leading to frustration with their bank.
As with addressing any emerging threats, new technology needs to be considered, and in 2024, more so than ever before, the savviest banks are seeing the importance of both predictive and generative AI. The benefits of predictive AI are numerous and well understood in fighting fraud. New models can profile emerging threats like authorised fraud and mules. Alongside this, generative AI now also has a prominent role in enabling banks to provide personalised warnings and adjusting consumer conversations based on contextual interactions.
