A recent report by accountancy and advisory firm BDO suggested that the volume of reported fraud in hit a 15-year high, with a total value of fraud increasing 538% to £2.11Bn. Considering the impact of Covid-19, companies have had to alter the conventional ways of operation and adapt to a more online-centric business model.
Since the eCommerce sector is booming, it has given rise to an increase of fraudulent activities, and companies will be faced with the same problems as before, but on a greater scale. According to a Wall Street Journal report - the overall percentage of attempted fraudulent digital transactions rose 35% (in-terms of dollar volume) in April from a year earlier.
An Uptick in Fraud
There are two main types of digital transactions that has seen an uptick in fraud recently:
- Friendly fraud: The financial pressures as a result of the current economic climate causing more people to commit fraud - customer makes legitimate purchase and receives item(s), however, disputes the transaction with the merchant to issue a full refund.
- Malicious fraud: Criminals taking advantage of the increased online activity, leveraging identify theft and phishing attack mechanisms to attract people looking for financial aid or new jobs – stealing identify details and committing fraudulent transactions.
To tackle these challenges companies must now look to new and innovative solutions to combat this rise in fraud across many sectors. One of the key focus areas is fraud detection/investigation:
- How can merchants better differentiate between what is a genuine transaction and what is fraudulent?
- How can they automate the follow-up actions?
- How do reduce the number of false positives and augment the human decision-making process?
The answer is Fraud Detection Automation.
Fraud Detection Automation Solution Overview
Blue Prism and Rainbird have collaborated on an fraud detection automation solution, which replicates the end-to-end fraud investigation process for major organisations - including data gathering, case decisioning, and follow-up action.
Fraud investigation processes are typically very manual, in particular for large banks and insurance businesses. They deal with a high and often unpredictable volume of cases which are increasing in complexity, and often involve hundreds of employees. Operational costs are high, and the quality and speed of response is often less than desired. Our fraud detection automation software can significantly reduce costs in year 1 by introducing unprecedented speed, accuracy and scalability. The solution is also fully auditable and explainable.
Solution Diagram for Integration of Fraud Detection Automation
Benefits of Fraud Detection Automation
The fraud detection automation solution offered by Blue Prism and Rainbird can deliver multiple benefits.
- Cost efficiency: by replicating and scaling fraud investigation expertise, operational costs can be reduced by up
- Reduced fraud loss: banks are increasingly becoming liable for fraud losses. Faster and more accurate fraud
investigations can help to mitigate these liabilities.
- Compliance: Rainbird provides a full audit of how the decision is made, including all the data, expertise and
- Customer experience: faster decisions and fewer errors will reduce customer churn rates. In the US, 40% of
customers put a credit card to the back of the wallet following an unnecessarily blocked transaction.
- Scalable platform solution: both Rainbird and Blue Prism are platform technologies which can be utilised to
solve multiple challenges across the business as well as in fraud prevention.
The combination of RPA and AI augments the human decision-making process by providing rationale for every recommendation, which in turn acts as an audit trail for any automated decision-making. Thanks to our recent partnership with Rainbird, a Blue Prism Digital Worker can now refer to Rainbird to solve a problem and then act on the answer provided, without ever needing to refer to a human worker.
Automated Fraud Detection Demo
The Intelligent Fraud Investigation solution delivers an end-to-end automated fraud investigation process for major organisations - including data gathering, case decisioning and follow-up action, helping address and mitigate the growing challenge of monitoring and preventing sophisticated fraudulent activity, in this unprecedented time of economic impact from Covid-19.