Criminals are patient. They continuously create fraudulent identities, open accounts and do a little bit of activity in these accounts for a period of time. A year, two years, maybe five years. They set the pattern and get the bank comfortable with the account.
They ask for credit line increases, or the bank offers them. Bit by bit, the $1000 credit limit grows to $2500, then $3000 and eventually – given the consistent and seemingly trustworthy record of normal card use and payments – the limit might reach $20,000.
That’s when the big transaction hits, and the fictitious credit card customer disappears – sooner if they think investigators might be on to them.
When fraudsters operate as well-organized enterprises with a work-in-progress mentality, there’s a constant stream of available accounts ready to bust out. Financial institutions could continuously be at risk to sophisticated “sleeper rings.”
The way these organized fraud rings operate today, their activities are difficult to detect with traditional, silo-based transaction monitoring systems. One system might flag a transaction as suspicious, but without a complete view of the customer’s relationships, the investigator could deem it innocuous. What if investigators could see the greater context around that suspicious transaction?
What if they could see that the account was linked in some way to another account? They might find that collectively the transactions are suspect, even if they appear normal when viewed in isolation. Imagine the power of having a holistic view of interconnections between accounts and transactions. Not just for individual transaction channels and products, but across channels and products. Not just for a customer relationship, but spanning a network of potentially related customers.
In spite of the high priority given to fraud, financial crime and security risks, traditional approaches to dealing with such risks are proving to be insufficient. That’s where a more holistic approach comes in. Read A Layered Approach to Fraud Detection and Prevention.