Feedzai, a leading provider of financial crime and risk management solutions, today announced significant enhancements to its RiskOps Platform, enabling banks to better protect their customers from a wide variety of financial scams. These new Feedzai ScamPrevent™ capabilities deliver industry-leading detection, classification, and interception of the widest variety of payment scams and financial fraud typologies.
Financial scams are an epidemic growing in both dollar volume and human impact. The FTC recently reported that between 2021 and 2023, losses from scams increased by 30% in the US. These losses are only the tip of the iceberg as globally only 7% of scams losses are reported, according to data from the Global Anti-Scam Alliance (GASA). As scammers now have access to generative AI using large language models (LLMs) to fashion increasingly sophisticated and realistic scams, these losses can only be expected to increase.
Most financial institutions employ multiple legacy point solutions that use rules-based approaches to identify different types of fraud, but fail to specifically target scams. These traditional approaches have three critical limitations:
- They are siloed by channel, so they are susceptible to fraud typologies that operate across multiple banking products or payment platforms.
- They identify fraud by either focusing on behavioral activity (such as biometrics, app and device usage patterns, malware incidence, and network activity), or financial activity (transactional data across one or more banking channels and platforms), but they don’t natively look at both together, which significantly limits the ability to rapidly diagnose a scam in progress.
- They don’t quickly evolve to protect against new types of fraud as scammers continuously change their tactics;
Feedzai’s RiskOps platform is the only solution in the industry that employs a unified AI model to build a 360 degree view of customer risk, monitoring a customer’s behavior and financial activity across the widest span of banking channels. Feedzai’s new ScamProtect™ capabilities build on this unique RiskOps approach to enhance the platform’s ability to identify and intercept scammers before their crimes impact customers, with:
- Improved AI-based detection. Significant improvements to Feedzai’s AI engine, based on learnings across multiple geographies and financial institutions, enable improved scam detection with reduced false positives.
- Custom scam rules. New capability to add bank-specific scam detection rules and thresholds on top of out-of-the-box AI detection delivers a rapid and customized response to new scam attacks;
- Early intervention. Digital signals, including behavioral biometrics and other non-transactional patterns, may suggest a customer could be a scam victim prior to them actually making a payment. New Feedzai features empower banks to identify these signals and create intervention and education opportunities earlier in the risk lifecycle.
- Inbound payments. To benefit from a scam, a scammer has to send money to an account they can control. New features enable monitoring of inbound payments as well as outbound to give banks multiple opportunities to stop a scam.
- Extended scam reporting. Customizable scam classification, performance metrics, and reporting.
“Consumer losses from scams are expected to surge as countries introduce or expand instant payment channels – like the US will do this year with the introduction of FedNow,” said Pedro Barata, Chief Product Officer of Feedzai. “The human impact of scams is particularly high as scammers tend to target vulnerable groups – the elderly, the economically disadvantaged, immigrant communities, and youth. As it becomes faster and easier to make payments, there is a growing need for new solutions that enable scams to be detected and intercepted before any money moves. With our new ScamProtect™ features, Feedzai delivers the industry’s most comprehensive approach to scam prevention.”
Recent data from McKinsey shows that when a customer is impacted by a scam, it is a make-or-break moment for their banking relationship. Their research shows that the difference in Net Promoter Score (NPS) of customers that had a “good” experience versus a “bad” experience when impacted by fraud was a massive 132 points. This data strongly suggests that banks that succeed in protecting their customers from scams will increase customer satisfaction and retention, while those that fail will see increased churn.
Increasingly, consumers hold banks responsible for personal losses stemming from scams. A recent independent survey conducted by Censuswide on behalf of Feedzai found that in the US, 76% of respondents were very likely or somewhat likely to leave their bank if they were not refunded for losses they suffered in a financial scam. In the UK, existing rules making banks directly accountable for reimbursement of affected consumers are likely to be tightened later this year. Legislators in other countries are considering similar measures.
“In this environment of faster payments and more sophisticated scams, banks should look at proactive strategies to protect their customers from financial crime,” said Nuno Sebastiao, CEO of Feedzai. “We believe that banks which embrace a comprehensive RiskOps approach will outperform in customer satisfaction and retention, while minimizing losses from financial crime.”