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4 Data-Driven Strategies To Bolster Transactional Monitoring

Digital payments market is expected to grow at 11.8% between 2023 and 2027, reaching a global market value of US$14.79 trillion by 2027. This rapid expansion complicates regulatory compliance and managing customers' ever-changing expectations and puts strain to avoiding fraudulent activities. Traditional methods of monitoring risk fall short, fraud defence requires more than vigilance,; it demands data-driven precision to usher in a new era of proactive security. Merchants globally allocate about 11% of annual revenue to combat payment fraud. A 2023 fraud report reveals that 60% of merchants aim to reduce manual reviews in fraud prevention. This article outlines four cutting-edge, data-driven strategies revolutionizing Fintech. All of these enhance transaction monitoring and fraud defense, thereby fostering a safer, more secure digital financial landscape that builds customer trust, loyalty, and revenue growth.

1. Harness the Power of Multi-Source Data Aggregation

In today's complex financial ecosystem, robust security hinges on deep data. Multi-level KYC paired with an automated risk analysis engine and leading monitoring technologies amalgamates identification data with engagement insights to provide a comprehensive risk picture in a centralized platform. This data fusion isn't just about knowing your customers; it's about understanding their behaviour and forecasting potential fraud with unparalleled accuracy.

Data orchestration solutions like AcuityTec enable businesses to seamlessly obtain all the KYC they require, complemented by real-time transactional monitoring and risk analysis. Eliminating the hassle of multiple API integrations, reducing strain on developer resources, simplifies data provider management and reduces overall data costs.

This unified approach counters the fragmented nature of traditional risk analysis. It pools KYC data, customer behaviors, and transaction history to produce faster, more accurate insights powered by data synergy.

2. Enter Perpetual KYC

A resounding truth echoes in the dynamic online landscape: KYC can no longer be implemented as a one-time endeavour confined to the onboarding processes. The changing tactics of financial fraud necessitate a shift to Perpetual KYC for ongoing protection against advanced fraudsters. EU Revised Directive on Payment Services (PSD2) on payment service providers moved to the regulatory requirement to uphold secure customer authentication (SCA) to reduce the risk of fraud for online payments and has already had a significant impact in reducing fraud.

The power of Perpetual KYC lies in its function to process identity-proofing from onboarding to ongoing transactions. Integrating into a data orchestration hub with dynamic fraud defence enables organizations to seamlessly obtain Perpetual KYC, advanced risk analysis and live monitoring, behaviour insights and trends to easily identify and negate any vulnerability of malicious actors. This approach ensures businesses are agile amid shifting regulations and enables a seamless transition from periodic reviews to dynamic, ongoing customer assessments for perpetual compliance.

According to PYMNTS' research, businesses that rely on legacy, reactive, and manual digital identity verification methods to meet compliance only experience a significant 4.5% loss in annual sales due to fraud. In contrast, companies that embrace proactive and automated solutions, leveraging Perpetual KYC and technologies like machine learning, manage to reduce their fraud loss to a considerably lower 2.3%.

Finally, the more KYC data you gather, the more robust your risk engine becomes in identifying behavior patterns and trends. This enriched data enables businesses to confidently increase transaction volumes for verified, trusted customers, thereby enhancing both security and revenue potential.

Businesses should adopt Perpetual KYC as a fundamental part of their evolving security strategy to stay ahead of evolving threats and to truly stop fraud’s impact on their revenues.

3. Process Real-Time Data Risk Analysis

When transactions happen at the speed of light, waiting even a few minutes to process data and risk analysis can create enough of a gap for fraudsters to slip through the cracks. A Juniper report predicted that businesses will lose more than $343B to online payment fraud globally between 2023 and 2027. Effective fraud defense lies in the real-time processing of data and risk analysis to instantly output risk scores needed to gauge the legitimacy of transactions as they occur. Businesses can improve their reaction times to fraud to significantly reduce revenue loss to fraudsters.

Providers like AcuityTec are designed to advance risk analysis operations by enabling businesses to configure custom risk thresholds for their risk score categories dependent on their risk appetite. Furthermore, security parameters can be dynamically adjusted in response to emerging risks to automatically redirect for additional verifications or pause transactions before processing.

In essence, the combination of real-time data processing and risk analysis creates a formidable, adaptive, and proactive defense mechanism.

4. Leverage Machine Learning

a. Pattern Recognition and Anomaly Detection: Machine learning algorithms can sift through vast amounts of transactional data to identify established patterns associated with fraudulent activities. These could include known suspicious behaviors like rapid multiple transactions within a short timeframe or attempts to disguise large transfers as small, inconspicuous ones. Equally important is the system's ability to perform anomaly detection.

AcuityTec merges the best of both worlds with a traditional rule-based system home to thousands of parameters and endless configurations with machine learning to adapt to emerging trends and identify previously unseen patterns or anomalies that may indicate new types of fraud. This dynamic adaptability is indispensable for staying ahead of increasingly sophisticated fraudsters.

b. Behavior Analysis: By automatically processing, analysing, and orchestrating data of legitimate users' typical behavior—such as their usual transaction sizes, transactional method, and even the times of day they are most active—you obtain more robust customer profiles with baselines for new transactions to be evaluated against.

Deviations from these profiles, like an unusual login location or an abrupt change in transaction habits, can be instantly flagged in real time for further investigation. Companies can immediately detect types of fraud like account takeover, which grew 121% in 2022 and experienced losses over $11.4 billion in the US alone or bust-out fraud, where quick detection can mean the difference between stopping a fraudulent transaction and suffering substantial financial loss.

C. Account associations: Further bolster fraud prevention efforts by linking accounts with common attributes such as device ID, IP address, email or behavioral patterns; the system can create a holistic view of user activity. This network of associations makes it easier to spot anomalies or suspicious connections, enhancing the machine learning and behavioral analysis models already in place.

In Conclusion

Fraud prevention in the digital age requires a multi-faceted approach integrating advanced technologies and methodologies. AcuityTec provides a comprehensive solution that encompasses all of these strategies and is easy to integrate with just one API. With AcuityTec you're adopting a constantly evolving, intelligent defense mechanism that continuously adapts to emerging fraud trends and is designed to protect your business now and into the future.

Learn More About AcuityTec's Solutions

Multi-Level KYC, Fraud Screening and Transactional Verifications in One Platform.

AML Compliance Watchlist Screening

Digital ID

Access a complete suite of KYC verifications for premium global coverage with custom workflows to instantly confirm customer's identity.

Global Document ID Verification


From SMS, Phone 4-PIN through to biometrics liveness and KBA you can easily enrich transactional protection to stop fraud.

Customer Authentication Data Services

Fraud Screening

Powerful, automated risk analysis with advanced rule-based algorithms to detect suspicious behaviour and secure engagements.

Smart Transactions


Our advanced monitoring with machine learning will detect account associations, behaviour patterns and trends with dynamic actions.

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