As the world evolves into a more secured society, hackers and frauds do also have techniques to counter these various securities.  A more digital way of avoiding these inappropriate activities can reduce the risks of information breaches.

Banks and other financial institutions are susceptible to various fraudulent schemes. Fraud detection is a security system that detects any form of fraud activity in the system.

Fraud Detection – Facts and Processes

Fraud detection is a set of processes that analyzes the activity within a certain institution. It identifies and prevents unauthorized financial activity. It prevents credit card fraud, theft, cyber hacking and scams, and other forms of information leakage.

It protects the money from being scammed by an unauthorized person. Fraud detection or a system is a great help to financial institutions to get all accounts secured at all costs.

Common Bank Frauds To Look Out For

Before going into details about how fraud detection works in banking, it is ideal to know common bank frauds to look out for. Of course, fraud is a long-coming issue that needs to be addressed with a high level of security. Here are some common bank frauds:

Wire Frauds

Wire fraud is a hacker scheme that can utilize various modes of communication including social media, telephone, and emails. They use certain tactics to convince banks and other financial institutions to pull large amounts of money for a reputable investor which is something that they are not.

Credential Stealing

Scammers use text or call phishing to convince someone to give their information out rightly. After getting the account details, one will be in serious trouble of getting his savings scammed. Bear in mind that this information is highly classified and can only be revealed to trusted or authorized persons.

Account Takeover

Commonly known as identity theft, account takeover is actually the next step after credential stealing. Scammers do use the stolen credentials to get into the accounts of the original owners. Usually, this happens during online services or payments. Be sure to be on guard for any online transactions.

Fraud Detection Techniques

As fraud became more prominent with the advancement of technology, the more the security needs to be at its optimum level. Here are some fraud detection techniques that helped banks to keep all accounts secure:

Artificial Intelligence

With the number of bank transfers and transactions daily, asking an authorized person to give real-time updates to each transaction is entirely impossible.

Usually, these transactions happen simultaneously which needs a higher form of intelligence to get the details right. Banks used AI-based automated systems to track transaction behaviors and also to identify fraudulent activities within the system.

Biometric Date or Security

In creating passwords, we always make codes that are beyond anyone’s imagination. With this in mind, the bank uses biometric data to secure the information of the owner. This is also a great help during a possible account takeover.

Technically, biometric data uses the owner’s biometric data which of course is very novel that cannot be duplicated by any means. Adding this layer of protection to any bank account will surely get a higher form of security.

Consortium Data

The more data or information we put together is a great barrier to any form of fraudulent activity. When banks work together and share information about fraud tactics, then the system to avoid these things will be a lot stronger.

Consortium data gives more power to the collective intelligence within the industry, where all the collected data worlds against the possible fraud activity attacking the system.

High Tech Standardization

A holistic view of your system is always the best security you can have. You will know what is happening to your accounts in real-time and you can always make changes to the security system. Making sure that all accounts have the same system will make good deductions on which account is being attacked by fraudulent activity.

The faster the banks consolidate the account systems the quicker it is to identify fraudulent activity within the system. Basically, the high-tech standardization of the company system will surely make all accounts secure.


Using a high level of technology and techniques to avoid any fraudulent acts is a way to keep our accounts secure. Of course, partnering with a trusted bank is also a great move to have our savings or investments intact.