WHY TACKLING OMNI-CHANNEL FRAUD IS KEY TO ENHANCING CUSTOMER EXPERIENCE

Christen Kirchner

Senior Solutions Expert, Fraud & AML at SAS Northern Europe

 

Over a decade after it emerged as a concept, providing a ‘good omni-channel experience’ has become a necessity for all customer facing industries.

 

As the financial service sector has become increasingly digitised, a growing number of customer touch-points have emerged. In fact, banks now interact with customers via online banking apps, SMS messages, email, face-to-face interactions, traditional paper-based methods, ATMs and even social media.

 

In light of this, many are focusing their attention on creating a seamless omni-channel experience for their customers, using data analytics and artificial intelligence (AI) capabilities to do so.

 

However, as the industry has seen time and time again, with new innovation comes new opportunities for fraudsters. As such, omni-channel fraud is becoming an increasing problem for banks.

 

The need to act

Omni-channel fraud is a type of fraud that occurs across multiple channels and can only be detected and prevented with multiple, advanced layers of protection.

 

A recent report by TransUnion confirmed that fraudsters are using every available digital channel to access consumer accounts. Between September and December 2022, 52% of consumers said they were targeted with online, email, phone call or text messaging fraud attempts.

 

As we’ve seen, fraudsters are ready to exploit any opportunity to make money from unsuspecting victims. During the COVID-19 pandemic, scammers called home phones and sent text messages pretending to be the government or NHS.

 

More recently, fraudsters impersonating Royal Mail have targeted unsuspecting shoppers with phoney delivery texts, or have turned to social media to find victims.

 

With fraudsters’ schemes becoming more sophisticated as customers use a greater number of channels, the onus is on banks to analyse all customer interactions together to stop fraudsters gaining access to their accounts, through detecting the risk of each transaction and flagging any anomalies.

 

For example, if there is an unsuccessful attempt to access a customer account from a foreign country, this should be immediately considered against any other suspicious transactions and activity, in case the fraudster has more luck through a different channel.

 

To get a comprehensive overview of fraud risk, banks need to take into consideration non-monetary actions, such as a client changing their address or requesting different cards. One of these activities alone may not be suspicious, however if this occurs after an attempt to access an account, it should set alarm bells ringing.

 

 Prioritising the customer experience

It may seem obvious, but at the centre of providing an exceptional service to customers is the ability to keep them safe from fraud. If a bank fails to update their systems to protect against the rising instances of omni-channel fraud, they risk losing out to competitors.

 

Equally important is the ability to detect - and then avoid contacting a customer – where an alert turns out to be a false positive. If an individual cannot complete a purchase after their bank mistakenly flags their legitimate transaction as fraudulent, or they have to spend time out of their day to rectify the issue, they will quickly become frustrated.

 

Currently, there is a limited ability to adapt business rules as soon as a new type of scam emerges - leading to a high number of false positives and disgruntled customers. Accuracy is key here - and advanced technology is paving the way forward.

 

Facilitating the solution

It is no longer good enough to view each customer touch-point as an isolated form of interaction. Banks need to focus on uniting their response, rather than leaving valuable data residing in separate silos.

AI and machine learning (ML) can help companies to tackle omni-channel fraud in real-time. This technology can constantly check for red flags and anomalies across multiple sources - providing banks with the means for a speedy, accurate response.

 

Within this, layered analytic methods can help reduce false positives, avoiding the need to unnecessarily bother the customer. With surges in identity fraud proving a particular concern for banks in the last few years, this technology also grants banks the ability to detect and adapt to new identity fraud trends.

 

As banks compete for the best clients and aim to consolidate themselves as a leader in customer service, the way forward is to understand developing fraud trends like omni-channel fraud - and act fast to protect customers.