Fraudsters and their patterns have transformed and evolved more than ever, in the wake of large-scale remote and hybrid workforce becoming the new normal. While new technologies are being deployed to make work and world easier, scams have increased by 92% and the fraud amounts have jumped 146% in 2023. The threat is very real in the accounting, banking and financial industry where many still use outdated technology and also due to the very nature of the sector dealing with standard paperwork and vast amounts of numerical data.

Robotic process automation or RPA and data analytics is highly sought after in the BFSI for its fast automation, high accuracy and cost saving benefits. However, a survey conducted for 164 financial executive international members suggests that RPA is seen and used mainly in lower-order tasks that reduce resource time and processes that are manual-error prone. RPA’s potential is underutilized to detect and prevent fraudulent activities.

Why is RPA important in proactive fraud detection?

While fraudsters are collaborating and networking on the dark web to break through systems and new technologies, a majority of enterprises are lagging behind in updating fraud detection techniques and implementing RPA analytics powered solutions to keep up with the emerging challenges.

Cyber criminals can obtain data, access funds and steal assets in countless ways in a swift manner. Legacy systems with weak security protocols are at high risk; for fraud is nothing but a crime of opportunity. High human involvement in workflows, no proper monitoring, gaps in processes can all create opportunities for criminal elements to take advantage. For every $1 lost to fraud, it costs financial service firms $4.23 and merchants $3.75.

It is critical to have effective fraud detection, prevention and recovery procedures in place. It is difficult to recover funds and virtually impossible to stop flow of funds when they are being moved in real-time. Automation is the only solution to stop flow of funds and cease damages immediately.

What are the benefits of RPA in fraud detection?

RPA and Data Analytics for Proactive Fraud Detection

Flag fake identities: According to NICE Actimize Fraud Insights Report 2023, out of the most prevalent scam affecting organizations, impersonation scams accounted for a whopping 76%. Also, new accounts pose 9.5 times more risk than mature accounts, so it is crucial to prevent document fraud at an early stage, before they gain access to your systems or services. With RPA technology, enterprises can use multi-factor authentication, automatically analyze data and pattern to flag fake identities and curb fraudulent activities.

Eliminate manual errors: RPA services eliminate human involvement in bulk processing. By automating processes in a strategic manner using intelligent bots, banks and financial institutions can drastically minimize the chances of manual errors.

Reduce false positives: RPA delivers consistent, rule-based tasks with 100% accuracy and thus significantly boosts fraud prevention and minimizes chances of overlooking suspicious activities. With accurate analysis of data patterns, RPA reduces false positives, making way for the organization to focus their efforts on genuine threats

Fraud analysis: Enterprises can program RPA bots to review and analyze their current and historical financial transactions to detect any anomalies, unusual customer behavior and restrict fraudulent activities. This also helps RPA in a larger sense as it helps the bots to study the organization’s environment and processes in a detailed manner for effective implementation.

Pattern recognition: By training bots with past fraud cases and making them assess historical data, enterprises can identify patterns. They can then ask the system to recognize similar patterns and flag potential fraud for prevention. Automating pattern recognition delivers faster and accurate analysis than manual investigation.

Real-time monitoring: RPA fraud detection can monitor threats real-time and generate alerts, when it spots suspicious activities, for necessary stakeholders to take immediate action. With its rapid processing capabilities, the bots ensure quick identification and response to incidents, mitigating risk and minimizing financial loss.  

Compliance and cost savings: RPA-powered bots are rule-based and hence adhere to policies and procedures to the dot, thus maintaining companies are in full compliance with regulatory authorities, reducing any room for penalties. In addition to protecting you against fraudsters and minimizing financial loss, RPA also saves substantial cost by reducing resource hours and delivering business goals in a faster manner.

Conclusion:

Intelligent automation has the capability to learn and evolve, using AI and machine learning. They can learn about your organization in a comprehensive manner and proactively defend you against fraudsters and cybercriminals. This in turn enhances your customer experience, reputation and helps achieve business goals. It is also important to remember that identifying automation processes and designing effective solutions is vital for successful implementation of RPA in fraud detection. Get in touch with experts to find solutions that work for you.

Button Example
Latest posts by Subashini Suresh (see all)