Fraud has been an evolving threat. It is not every fraud monitoring tool on the market that can keep pace with new schemes that have constantly been popping up. This is the main reason why it is important to be able to deploy right fraud solution but to be very successful; there are several factors which will need to be highly considered. Regulatory compliance is going to play a very important role when deciding must have in the fraud monitoring tool. Nowadays, compliance with PAAY psd2 compliance and the technical standards is among the key drivers of change in the Europe region. Banks will need to have several installations to be psd2 compliant.
One of the major rules which were introduced by psd2 is mandatory transactions monitoring. As it has been defined in Regulatory Technical standards on the Strong Customer Authentication and the common as well as secure communication, transaction monitoring becoming mandatory for all the payment providers. To be able to allow a more user-friendly journey, RTS foresee some cases where specific transactions can be exempted from the strong customer authentication, offered proper transaction monitoring in place and the various conditions being met.
The fraud monitoring tool is an application which has been designed to easily identify and also prevent fraud and well controlled by the fraud analysts. Previously, such tools had simple functions, involved more in manual work and well operated in reactive mode. Banking tech stack was siloed, and so was the fraud monitoring.
In the recent world, the new fraud systems, usually tend to be more complex. At the same time, they tend to remain agile and super easy to use. They get to automate the processes and work proactively. The modern fraud system has rarely been a single tool, but rather the solution which natively integrates various technologies meant to work. With the increase in the wide range of special tools which are available to the financial institutions, choosing the best one can be quiet hard. So, what should they look for?
A fraud monitoring solution should easily be able to meet a certain set of standards. Well, generally, it must take into account the new generation of the end users and some more complex types of attacks and the evolving regulations. When it does come to some specific features, it is important to be able to mention that solution should enable full compliance with the PSD2 and needs defined in the technical standards.