Fraud is a lurking nemesis. It literally has the potential to affect any transaction of a financial nature. From services to simply withdrawing cash from a bank account, account takeover fraud is all too common. Why does this happen?

Today, with technology touching every corner of the world, especially in financial operations, customers are digitally linked to every kind of institution, from banks to hospitals. In fact, financial investment companies and banks alike make digital profiles of customers with the aim of improving customer satisfaction according to Bahaa Abdul Hussein.

What is Account Takeover Fraud?

Banks use all the best practices at their disposal to create customer profiles that give information about distinctive client behavior patterns while spending and saving. In a bid to make the client experience more personalized, financial institutions have customer interest at heart. Nonetheless, when client’s open bank accounts, they may be offered the following and these may be exposed to account takeover fraud:

  • Providing a debit card
  • Making an offer of a credit card
  • Giving loyalty program and rewards information
  • Compelling clients to enroll for internet and mobile phone banking
  • Explaining P2P capability
  • Explaining about ATM locations and services
  • Giving clients a customer service phone number

Account takeover fraud means that a client’s account has been hacked into online. Data from that account is used in an attempt at theft of funds, or other criminal activity aimed at theft. The services mentioned above are potential points of contact between the client and the institution. Any of these can be open to spurious activity by cybercriminals.

Cybercrime on the Increase

The consumer points of touch mentioned in the last section are the tip of the iceberg. Account takeover fraud occurs in areas of loans, investment and savings accounts, and many more. In case you are in charge of client care at any financial institution, you must ensure safe services and transactions. The reputation of any banking and financial institution rests on the credibility of services and their safety. Defending customers against account takeover fraud should be any organization’s main goal.

The primary form of fraudulent activity today is “identity theft”. You may have seen this in the movies, but it is all too real. In 2021, the cases of identity theft in the US was at over 5 billion. The numbers are bound to increase with digital activity almost mandated in all financial actions and processes. The aim of identity theft? Once someone steals your identity, the next step is to get into your account, take it over and perform transactions to withdraw all your cash! Besides account takeover fraud, other cybercrime involve the use of credit and debit cards, also on the rise.

How to Fight Fraud

Banks and financial organizations cannot afford to take fraud lightly. The last thing any banking institution likes is customer dissatisfaction, and above and beyond that, any legal action. Risk-management plans should be in place, and data which is connected can help to mitigate risk of fraud. The key way to do this is to know your clients well and see that they are authentically accessing their bank accounts.

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