Voice of the Industry

Interview with Feedzai on the benefits of having a risk-based approach to prevent fincrime

Tuesday 9 August 2022 09:30 CET | Editor: Raluca Ochiana | Voice of the industry

To prevent fincrime, the banking industry needs to have a modern, holistic, risk-based approach, suggests Richard Harris, SVP Strategy and Advisory at Feedzai.

'A RiskOps approach allows Financial Institutions to seamlessly handle the challenges of identity, real-time data, and collaboration across teams and deliver better services to their customers.'

The banking and fintech world has seen major changes in the last 24 months. What big shifts are happening and why?

First, we see an increase in the speed and amount of data processed in real-time. The expectations of retail banking customers have increased exponentially through daily interactions with the likes of Google and Amazon. At the same time, data generated has increased massively. Conducting an in-person transaction at a bank might create a few entries at a branch. Transacting online could generate more than 5,000 rows of behavioural and transactional data. Using this instantly to meet customer experience expectations creates a significant challenge.

The second big trend that isn’t going away is solving for identity. In a pre-digital world to get a bank account would just require paper – e.g. passport or driving licence. Online identities are more complex. The modern generation doesn’t have one identity per platform, it has multiple identities even on the same platform, across multiple devices. The average American now accesses the digital world through 10 or more devices. Identity is broken in that there is never going to be a simple centralised solution. To work out if you are who you say you are now requires a continuously evolving behaviour-based view.

And lastly, the newest trend is collaboration across teams. Financial crime traditionally was solved by putting people into the same building and via face-to-face interactions. Now, with many banks having shifted their operations online, this approach is much harder than it used to be - and the legacy systems in place were not built to support it.

What are the risks facing traditional and new FIs?

We have seen a drastic rise in fraud levels from 2019 to 2021, a trend highlighted in the recent Feedzai Financial Crime Report. The biggest story of 2021 was the substantial increase in online fraud attacks. While online transactions increased by an impressive 65%, this number was dwarfed by online fraud attacks, which grew 233% from 2019 through 2021. Our data predicts that this trend will continue.

Another trend is an increase in an older demographic using electronic banking. What we find when talking with clients is that multiple groups are more vulnerable to scams, and typically it is about the experience, not age. So, this isn’t a demographic risk at all, it’s more about digital financial literacy. 

In Compliance, we see less drastic changes, but crypto is a rising concern for many, even though the impact in terms of volume remains low. The core challenges remain that with the increased volume of payments, and complexity around identity, finding the risk amongst the ordinary is increasing the challenge to find suspicious behaviour. It’s more important than ever to be able to be efficient at investigating and helping teams work together.

What are the main ingredients of a new approach to tackling fincrime: tech, people, talent, expertise, approach, all?

Tech is the baseline - you need the right data at the right time. With attack levels rising, what is needed is an integrated approach to dealing with financial crime. It is no longer enough to have different teams focus on specific challenges. To defeat scams, online fraud, and maintain compliance while still delivering a seamless onboarding customer experience, a native integrated approach is needed. RiskOps is just that - a single coherent approach to beating financial crime that seamlessly handles the challenges of identity, real-time data, and collaboration across the customer lifecycle while increasing productivity and delivering better services to customers.

What advice would you give banks to get prepared for the next 5 years?

The first point - be flexible. If your solution is not flexible or under your control, whether that’s rules or models, then that’s a major issue. The good news is that people in the business of stopping fincrime are very motivated and creative. 

Secondly - focus on communication with customers. I recommend FIs send out more personalised alerts and warnings that apply to their users and their habits as individuals. 

Thirdly - consider how you collaborate, internally and externally. With staff – using a single system provides the opportunity to work smarter. With partners and providers consider ways to share best practices and know-how. 

Fourth – don’t be afraid to share innovative ideas and new approaches. Living in a culture of caution and fear is not going to move the needle. The new RiskOps age presents a fantastic opportunity to turn the tide against criminals.

And finally – be fair. Access to banking services is paramount today and protection from financial crime must be done in a fair, accountable, and transparent way, and AI, or any other form of tech, should not be detrimental to consumers. 


This editorial was first published in our Financial Crime and Fraud Report 2022, which showcases the innovation and development of the best practices and instruments used by financial institutions in their fraud prevention activities, to improve the digital onboarding process of their customers while fighting against financial crime.


About Richard Harris

A veteran in both the finance and technology industries, Richard joined Feedzai in 2015 to scale the global sales team and now leads the company’s Advisory function. Before joining Feedzai, Richard held Vice President roles at both Experian and American Express, during which time he built global sales and product organisations. Richard led GTM for ecommerce at Visa across 83 markets as part of the team that bought CyberSource. He has also owned payment gateway P&Ls at PayPal, after starting out as a C++ engineer pioneering eCommerce at Dell.com in the late 90s.


About Feedzai

Feedzai is the market leader in fighting fraud with AI. We’re coding the future of commerce with today’s most advanced risk management platform powered by big data and machine learning. Founded and developed by data scientists and aerospace engineers, Feedzai has one mission: to make banking and commerce safe. The world’s largest banks, processors, and retailers use Feedzai’s fraud prevention and anti-money laundering products to manage risk while improving customer experience. Visit feedzai.com and follow-on social media for more information and the latest company news.

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: digital banking, risk management, digital identity, fraud prevention, financial crime
Categories: Fraud & Financial Crime
Companies: Feedzai
Countries: World
This article is part of category

Fraud & Financial Crime


Discover all the Company news on Feedzai and other articles related to Feedzai in The Paypers News, Reports, and insights on the payments and fintech industry:

Industry Events