How Financial Institutions are Finding Protection as They Face an Increase in Fraud Risk Due to COVID-19

//How Financial Institutions are Finding Protection as They Face an Increase in Fraud Risk Due to COVID-19

The current health crisis has exposed businesses across the world to many risks that didn’t exist before. Many small businesses are struggling to survive while navigating how to remain relevant without the ability to typically meet customers face-to-face. Even as the country reopens and when this crisis comes to an end, it will take a signification amount of time before everyone feels comfortable returning to their normal lives.

The financial services industry hasn’t been spared from the realities of this pandemic. In fact, financial institutions are faced with the same risks as all other businesses, but also dealing with an increased fraud risk.

As we saw with the Paycheck Protection Program (PPP), banks and credit unions experienced several cases of fraud. As financial institutions work to administer the government’s various support programs for small businesse­­s, comes an opportunity for criminals to take advantage of the system. Many bankers believe they are­ exposed to an increased risk as they fear they will be on the hook for these cases of fraud.

According to a story published in American Banker, “The rescue program Congress enacted in response to the coronavirus pandemic to funnel government-backed loans to small businesses has been marred by complaints of overwhelmed call centers, preferential treatment for certain customers, missing paperwork and other alleged mistakes.”

With little time to develop and prepare for a new process, no specialized technology in place in most institutions and no training program in place for employees, institutions face a major risk. They’ve had to address how to prevent fraud and protect themselves, all while facing pressure to approve these emergency loans quickly.

As these institutions scrambled to respond to a wave of small business loan applications, the risk of data compromise has increased as many small businesses are tightly coupled with the personal information of individuals who own them. That’s why we were very pleased to be chosen to support Breach Clarity, a fraud prevention and detection technology firm that provides consumers and financial institutions with a greater degree of transparency around the risks associated with data breaches. The company offers a suite of solutions that strengthen consumer protection from the onslaught of data breaches by minimizing confusion and financial losses surrounding identity theft and other risks associated with data breaches.

We developed these solutions for Breach Clarity, including Breach Clarity Premium for Financial Services – a platform designed specifically for banks, credit unions, issuers, brokerages and insurers to provide clarity around impacted customers and stolen data, easier security control activation for customers and reduction in contact center volume. This new artificial intelligence learning platform for financial service providers was designed to enable highly targeted protections for bank customers and credit union members.

While the tools developed for Breach Clarity were not designed with a global pandemic in mind, they are meeting a very real need in the age of COVID-19. We are proud to be a part of a project that will provide banks and credit unions with solutions they need now more than ever.

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