Untangling the toolchain crisis: interview with Feedzai's Chief Product Officer, Saurabh Bajaj

Saurabh Bajaj, the Chief Product Officer at Feedzai recently set aside some time to discuss the problems retail banks face in a digitally-evolving world

In recent years, it's become apparent that data silos pose significant problems to banks going through digital transformation. You also note that data silos are a problem for effective risk mitigation. Why?

Attacks have become increasingly transversal, meaning they’re affecting banks across multiple channels. There was a time, when the attack may have come via a phone call or computer, but now the attack comes through both channels. And this has put banks, and their customers, at a tremendous disadvantage because banks often approach the problem channel by channel. That means they’re using data from individual channels instead of combining all the data from all of the channels. It’s like wearing blinders, expecting to see a sweeping landscape. You can’t.

Even if you have a platform that uses top-of-the-line machine learning and artificial intelligence — all of these advanced state-of-the-art tools — the results will only be as good as the data the platform accesses. If you don’t give the AI access to all of the cross-channel, or transversal, financial crime patterns, and transaction data, then even the best AI can’t accurately detect fraud or financial crime across those channels. Siloed data is a financial criminal’s best friend. It makes avoiding detection so much easier for them.

What should banks do to break down these silos? Where should they start?

In truth, identifying where to start can be tricky. Typically, major banks face what we call a ‘toolchain crisis’ — essentially each internal team, whether it be Fraud, Compliance, or other internal departments, has a different method for solving the problems they’re facing. So, they adopt unique tools that match their individual strategies. These tools often don’t natively integrate with each other, so while they might solve the immediate problems that a specific team is looking to address, they don’t enable data sharing across the organisation — further contributing to data silo issues.

The first step banks should take revolves around this concept. They should be looking at different ways to untangle this ‘toolchain crisis’. They should also begin looking for platforms that can be applied across their existing data silos (as a way to break the silos down).

But, and this is equally important, untangling the toolchain crisis and breaking down data silos requires improvement in cross-org communication and visibility. CCOs & CROs (among other internal personnel) can look to challenger banks for insight on how to do this. Since challenger banks typically have to run leaner operations, they don’t have the capital to build out entire fraud and compliance organisations. They have to build their risk mitigation strategy alongside a unified data strategy from the ground up. I really think this is the mindset that larger banks need to adopt too.

After you start to untangle the ‘toolchain crisis’ and break down data silos, what’s next?

Once your team is sharing data, the next logical step is to adopt a platform that spans across use cases. Imagine how much more efficient an organisation is if their teams use the same data on the same platform?

This concept is referred to as ‘omnichannel’ — a term that is frequently thrown around — but everyone has a slightly definition for. Banks need to think carefully about what ‘omnichannel’ really means for them.

Omnichannel, by its current definition, refers to a platform that spans across different payment types, and allows you to consolidate data from those channels to get a holistic view of your customers. While this process is critical, omnichannel needs to be redefined as something significantly more broad. True omnichannel needs to incorporate not only different use cases for fraud or compliance, but different use cases across both fraud and compliance.

Incorporating different uses cases across both fraud and compliance enables banks to monitor customer behaviour from multiple angles (fraud, compliance, or any other wanted angle) on the same data lake, which gives banks access to a risk platform that allows them to measure small deviations in behaviour across all of their channels and products. These real-time changes can be captured in customer profiles and used to train AI to detect fraud and financial crime with a level of accuracy that can’t be accomplished any other way. At least not today. When you combine this with more powerful data science tools, like AutoML that can run on omnichannel patterns, banks are able to adjust their risk strategies in real time to confront new threats.

These platforms take terabytes of information (massive amounts of data) and distill it into actionable insights in seconds. Then, those insights are put at the fingertips of the bank’s digital, risk, and compliance teams. And, teams can conduct investigations on one central platform, not across excel sheets, different CRMs, case managers, or other tools.

Obviously, not all platforms are the same. And banks have to be careful to conduct proper due diligence when evaluating any platform. Many platforms that market themselves as end-to-end or complete often struggle with silo problems of their own. Since risk platform vendors sometimes start by targeting a specific type of fraud (i.e. card fraud), they develop a solution in a vacuum — and develop these platforms in a way that best targets that specific risk problem. As these vendors grow, they want to target additional use cases, so they continue to build individual solutions. While these solutions work well for their individual problems, they don’t integrate with each other well, and, instead of aiding in the dismantling of the toolchain crisis, amplify the crisis. So, when you go shopping for a risk management platform, make sure to ask: ‘How do your different solutions integrate with each other?’ The answer should be: ‘They’re all based on the same platform, so they integrate seamlessly’.

The value behind these omnichannel risk platforms is apparent for banks, what about for their customers?

The customer journey is not just a marketing principle nowadays. It’s a core component of digital banking. Poor UX can easily deter good customers, and good UX can bring customers in droves. Customer expectations have only increased as digital transformation has pushed forward.

The most visible example of companies doing this today are the technology giants. Amazon, for example, doesn’t think twice when a delivery problem occurs. Instead, they go out of their way to ensure that customers are satisfied. And that’s how you create long-term value today.

Fraud and financial crime processes can easily get in the way and deter good customers in these situations. Nobody likes when their credit card gets canceled while their standing out in the rain trying to get gas.

Omnichannel platforms provide the ability to wield holistic data to prevent these situations from happening. The same customer may have a credit card, student loan, and a savings account. This all has to be taken into consideration when making any decision.

So, a silo-less view of your customers means better fraud and financial crime detection for yourself, and a better customer experience for your customers. What’s more, it provides a pathway for growth because connected data provides deep customer insights. That means organisations can more accurately predict what products and services a customer wants and present him or her with a specialised offer. Migrating to an omnichannel platform takes coordinated effort, but it’s a long-term win-win.

About Saurabh Bajaj

Saurabh Bajaj is Chief Product Officer at Feedzai, where he leads product development and management to bring the most advanced financial crime fighting technology to market. Prior to Feedzai, Saurabh was head of fraud and risk products at Neustar, a leading identity resolution company. Saurabh holds a Bachelor of Engineering from the University of Mumbai and an MBA from the University of California, San Diego.

 

About Feedzai

Feedzai is the market leader in fighting financial crime 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.