OCBC Bank and SAS wage war on fraud with award-winning digital surveillance system

The proactive fraud detection system helped OCBC recover $8m worth of fraudulent transactions.

As part of its anti-fraud programme, OCBC Bank has deployed a Fraud Surveillance System (FSS). Developed together with SAS Institute, a leading software analytics company, the FSS uses a combination of flexible data and network analytics, as well as cutting-edge surveillance techniques, to monitor customer activities and transactions.

The pandemic drove a digital banking boom like no other, and scammers were quick to cash in on the trend. In Singapore, banking-related scams surged in the wake of the pandemic, leaving clients vulnerable to phishing and other means of fraud.

OCBC Bank and SAS collaborated in a phased deployment of FSS as part of the Bank’s Operational Risk Management programme to monitor customer activities and transactions, resulting in improved customer experience and operational outcomes.

A holistic approach

The solution’s capabilities include assisting in the detection, investigative remediation, and analysis of customer fraud exposures using multiple analytic techniques including predictive modelling, text mining, and network link analysis, amongst others. This allows the system to proactively identify known and unknown patterns.

The holistic capability of FSS enabled monitoring of customers’ transactions and alerts in real-time. Monitoring was done across multiple channels, including ATM, CASA, online banking, mobile banking, wire-transfers, as well as corporate transactions. With FSS, synergies were realised across OCBC’s operations in multiple countries.

As a crucial part of OCBC Bank’s anti-fraud programme, the FSS played a significant role in the recovery of approximately $8m worth of fraudulent transactions in the first year of production use, and on Singapore activities alone.

In 2020, OCBC reported that more than $10m was prevented from falling into the hands of fraudsters through its anti-fraud programme. The bank was lauded by law enforcement agencies, and the bank also received 27 awards from the Singapore Police Force in recognition of its multi-faceted fraud prevention efforts.

This multifaceted fraud prevention strategy involves various measures and stakeholders, combining the latest technology, traditional detection methods and involving staff at branches who interact with customers. Apart from using the latest technology, the bank has also expanded the monitoring scope and capabilities of anti-fraud measures, revamped its fraud education programme to strengthen fraud awareness amongst its staff, and extended the whistle-blowing programme to the public. Proactive risk management also remains a core focus, concentrating on vulnerable customer segments.

With the increased volume of online banking during the pandemic, OCBC saw the number of customer accounts opened digitally in 2020 increase by over 160% compared with 2019.

The FSS is part of OCBC Bank’s commitment to using technology to combat fraud. OCBC Bank recognises that while the bank does not hold liability for transactions conducted by customers on their digital channels, they have invested into the technology to help potentially save customers from falling prey to fraudsters and scammers. OCBC Bank has long been at the forefront of technological innovation and was the first Singapore bank to tap AI and machine learning to combat financial crime; not to mention, the first bank to launch its own AI unit in the country.

OCBC Bank’s Group Operational Risk team has extended the real-time fraud surveillance coverage to international branches, including its Hong Kong subsidiary, OCBC Wing Hang Bank (April 2021), and OCBC Hong Kong Branch (May 2021). The system will also be made available in OCBC’s branches in South-east Asia such as Thailand and Vietnam (end-2021).

For their efforts in proactive fraud detection and prevention, SAS and OCBC Bank were awarded Branch Innovation of the Year - Singapore and Online Banking Initiative of the Year - Singapore at the Asian Banking and Finance Retail Banking Awards 2021.