ExploringMethods for Trading Companies: Balancing Fraud Deterrence with Customer Retention
Trading companies are gearing up to tackle the growing challenge of fraud, money laundering, and terrorist financing in their industry. The first question and answer session, hosted by Sumsub, will focus on this topic, aiming to provide insights on how trading firms can combat fraud while retaining customers in both existing and emerging markets.
Juniper Research predicts that online payment fraud will cost businesses a staggering $362 billion between 2023 and 2028, underscoring the urgency for effective fraud prevention measures.
To address this issue, trading companies are urged to implement robust internal controls, proactive fraud detection, customer education, and rapid response capabilities. Key strategies include:
- Robust Internal Controls: Implementing strict authorization workflows, tiered approval levels for transactions, and comprehensive documentation for transactions to ensure a clear audit trail and third-party reviews.
- Dedicated Fraud Prevention Teams: Establishing cross-functional teams spanning business, IT, communications, and customer service to coordinate efforts for rapid detection and adaptation to emerging fraud tactics.
- Real-Time Fraud Detection and Analytics: Utilizing real-time monitoring systems powered by AI and ML to identify unusual payment patterns, behavior anomalies, and emerging fraud schemes before losses occur.
- Multifactor Authentication and Maker-Checker Protocols: Strengthening identity verification and requiring dual control on critical transactions to reduce the risk of internal and external fraud.
- Data Sharing and Collaboration: Participating in intelligence-sharing networks to stay informed about evolving fraud typologies and to trace fraud activity across borders and sectors.
- Customer and Public Education: Educating customers on fraud risks and prevention tactics to empower them, reduce victimization, and maintain trust.
Technologies supporting these strategies include machine learning and AI, real-time analytics engines, multifactor authentication systems, automated vendor and payment validation tools, and whistleblower hotline platforms.
The first Q&A session will be led by Pati Murtazalieva, VP of Global Sales Operations. Followers are encouraged to submit their own questions through Sumsub's Instagram and LinkedIn. The series will be held every other Thursday.
In order to effectively mitigate fraud risks while preserving customer confidence, trading companies should assess the risk level for all associated legal entities, identify the nature of customers and their portfolios, especially high-net-worth individuals and institutional investors. By combining comprehensive internal policies with advanced technology such as AI-powered real-time monitoring, multifactor authentication, and intelligence-sharing networks, trading companies can effectively combat fraud risks while maintaining customer trust through transparency and responsiveness.
- To align with Trading companies' efforts in combating fraud, a strategic integration of technology in finance business is necessary, implementing AI-powered real-time monitoring, multifactor authentication, and participation in intelligence-sharing networks.
- In the face of growing fraud challenges, promoting customer and public education about fraud risks and prevention tactics, hand-in-hand with robust internal controls and proactive fraud detection, will empower customers and bolster trust in trading businesses.
