Risk Management Strategies To Combat Fraudstersby@hlorenz
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Risk Management Strategies To Combat Fraudsters

by Hanna LorenzMay 7th, 2022
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In an increasingly digitized world, cybercriminals are taking to the internet to share exactly how they commit fraud.

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Fraudsters and hackers are trending on social media—and it’s not because of a fun TikTok dance.

In an increasingly digitized world, cybercriminals are taking to the internet to share exactly how they commit fraud. From breaching company databases to editing insurance policies, their detailed instructions can be easily found via Discord, Reddit, and TikTok. The “2022 hacker” is confident in their abilities and hopes to incite others to perform the same crimes with ease.

Social media is not being moderated, and that’s a big discussion in itself. It’s a big problem that a lot of companies that we work with are thinking about. In this new age of proud hackers, businesses need to protect themselves and their customers with the latest technologies.

So the question is: How can we keep up and fight fraudsters? Many companies are utilizing artificial intelligence and pen testing in their risk management strategies. Here’s everything you need to know.

Pen Testing (PTaaS)

Protects Clients From: Encryption gaps, broken authentication, network configuration issues, hardware, and software problems

Information technology (IT) companies are beginning to offer Pen Testing as a Service (PTaaS). To put it simply, Pen Testing is a cloud service that finds cyber vulnerabilities within a company’s data center and helps them strengthen its security measures. This technology thinks like a hacker when solving each issue, and it allows for forward-thinking as internet scammers continue to look for encryption gaps.

For example, Altimetrik is now launching a Pen Testing service for their clients. As a digital business enablement company, their goal is to accelerate their clients’ revenue growth and development by removing disruptions. Their expertise in Data Engineering (among other fields) makes them a leading force in digital transformation and cybersecurity.

In other words, the security team at Altimetrik builds up the armor that fintechs need to shield themselves from fraud attacks.

Their teams are made up of locally available talent (which means they are available where you are), and are equipped to assist customers in building a Security Maturity Matrix that identifies gaps in security and helps move the customer towards best-of-breed solutions. As an additional service, their experienced engineers provide tailored security training to the customer’s developers to think like hackers so that security is embedded in the development process itself.

Unlike previous PTaaS measures, these new tests are automated. Customers are able to view their data in real-time rather than looking back at historical data. At the push of a button, organizations receive tailor-made figures written up in a comprehensive report. The reasons for a company’s security breaches can be much more easily identified with Pen Testing. These tests are both efficient and cost-effective, from network configuration issues to hardware problems.

PTaaS is designed to serve organizations that do not have the budgets to maintain a full-time security team but do not want to compromise on their security—plus they want the freedom to access the service based on their schedules. There is no simpler way of achieving those goals.

AI-Fraud Detection

Protects Clients From: Fraudulent documents, tampering, unauthenticated records

In addition to Pen Testing, companies are beginning to utilize AI-fraud detection strategies when upping their cybersecurity game. Inscribe is leading the pack with their automated document processing, and their artificial intelligence technology is able to digitize and verify important documents without the risk of human error.

Traditionally, fin-techs and insurance companies have employed manual tracking strategies when processing records. This means that humans have been digitizing and authenticating documents all by hand. Not only is this process inefficient, but it allows fraud to run rampant when missed by the human eye.

Companies like Inscribe use technology that saves companies time and money while also increasing productivity and accuracy—and there are many patterns that artificial intelligence can detect that humans cannot.

Machine learning is one of the best weapons against bad actors because it can quickly make sense of large amounts of data and identify patterns humans can’t. It can also improve the more data it receives and can scale efficiently. This scalability has proven to be incredibly important with the increase in data available in recent years.

In addition to detecting fraud, these types of artificial intelligence aim to create a much more positive customer experience. Speeding up the authentication process means that good customers can receive answers involving their finances faster. For insurance providers utilizing manual document processing, it can take weeks or even months to review a customer’s application. Time is sensitive in this sector, and AI-fraud detection can help manage the queue.

In addition to automated document processing, many other features help keep scammers away. Trust Score gives clients a rating between 0 and 100 that indicates the trustworthiness of submitted records. Artificial intelligence scans these documents for signs of tampering and gives them a number based on several variables. The closer the Trust Score is to 100, the more likely it will be authentic. Customers are also able to auto-accept or auto-reject documents based on these ratings. Or, they can flag documents for manual review.

Are These Technologies Fraud-Proof?

Of course, artificial intelligence technology is still in its early stages of evolution. While it is unlikely that these strategies are 100% fraud-proof at this point, there is a significant amount of evidence suggesting that it has the edge over manual detection. In a post-pandemic world, fraudsters are committing so many more crimes that companies cannot keep up with on their own.

With the growing Work from Anywhere (WFX) trend, a remote workforce heightens the potential risk, resulting in an increased need for security surveillance and enhancement. Continuous and point-in-time penetration tests are the answer for web and mobile applications, networks, infrastructure, and end-point devices.

Raising awareness around the benefits of artificial intelligence will help insurance providers identify it as a sidekick rather than a villain. So, let’s take fraudsters off our TikTok For You pages and give these fraud-detection strategies the spotlight.