Fourth Installment: SAS Executive Stu Bradley Discusses 2024 Anti-Fraud Report and Its Findings

Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions at SAS, with Erik Vander Kolk of Banking Exchange. This is the fourth of a four-part interview that will be displayed this week on Banking Exchange.

Erik Vander Kolk
One of the things we hear is the need for faster payments, but at the same time, particularly for international banks, it also brings challenges in terms of fraud prevention.

Stu Bradley
Well, it has to be fast, right? These are transnational organizations. The ability to make those decisions quickly is critical. We've aggregated the right information already, and we’ve been able to link that information together to give financial institutions, government agencies and organizations across the board a better chance of preventing some of the most pervasive and harmful schemes.

Erik Vander Kolk
You mentioned with everything moving so fast, the technology these financial institutions might think is important right now might not be in six months. So, what would you say to them as they look and they see seven eight players that do different things for them? Do you think they need to rethink that? What should go into an overall strategic plan at a financial institution?

Stu Bradley
Many of my executive conversations, they start with, “What should I be aware of that's coming on the horizon? What scam should I be thinking about next?” It's a good question, but it's actually the wrong question. They should be asking, “What do I need to do to be agile enough to address whatever scam is coming down the pipeline?” The truth is that it's always going to be changing. The bad actors are always going to target a different product, channel, segment of your population.

The first thing I recommend is to take a step back. Make sure you are doing frequent risk assessments across your products, channels and customer population to understand and ensure that you've got full coverage across the spectrum.

There's a great example that's going on right now. Banking pros in Europe and other regions will roll their eyes when I say this, but one of the most frequent conversations I'm having with US banks these days is about check fraud. But this is a natural evolution of the fraudsters going to where the easiest money is. Banks have invested so much in rolling out digital applications and protecting those digital channels that they inadvertently left the back door open to check fraud. They haven’t advanced that technology in the slightest over the last decade plus. The fraudsters noticed, and now they are attacking that channel and attacking it hard.

Erik Vander Kolk
Wow. That is surprising.

Stu Bradley
And it's the same old schemes that they're doing. It's mail-drop fraud.

It's taking checks. It's washing checks. Even with the OCR [optical character recognition] that banks have and other capabilities that are out there, including using AI to validate whether a check is fraudulent or not, they don't have the ability to keep up.

Erik Vander Kolk
Wow, full circle back to checks.

Stu Bradley
The key takeaway is this: banks need to have that broad view across the entire ecosystem to be able to prevent fraud from a holistic standpoint. They need the right tools based upon the maturity of the organization combined with the right integrated architecture, or platform of capabilities, that will allow them to quickly adapt to and address the ever-changing fraud schemes and trends. That is going to be tremendously important, particularly as their adversaries increasingly take advantage of generative AI and other advanced tools and technologies.

That's where I steer the conversation. It goes back to creating more of that enterprise approach, but doing it one channel, and one product, at a time. That sets a baseline that allows them to not only enhance their risk management but also reduce cost over time.

Erik Vander Kolk
What are some final points that are really meaningful that came out of this survey?

Stu Bradley
Perhaps my biggest takeaway from the Faces of Fraud study – and I mentioned this before – was that two-thirds of consumers are willing to change service providers, including their financial provider, for one that offers better fraud protections. That illustrates that banks’ anti-fraud investments can be a differentiator in a competitive market.

The other thing we learned is that consumers are much more willing today than they have been in the past to play an active role in fraud prevention. Three in four are willing to accept transaction delays and checks to improve fraud safeguards. Eight in 10 are willing to use biometrics. Seven in 10 are open to providing more personally identifiable information if it is going to be used for purposes of fraud prevention.

Banks really have to see that the pendulum is shifting from “I want all of these digital services” to “I want these digital services AND to be protected from a fraud perspective.” If consumers are willing to change banks due to fraud risk, it really puts banks on notice. They must find that balance between the service and engagement model and how safe that engagement model is for their consumers.

This presents a tremendous opportunity for banks. Taking a more holistic approach can enable them to create a differentiated experience that will help them better serve their existing customers and also acquire new ones.

Erik Vander Kolk
Stu, thank you so much for your time. It is very much appreciated. You are always welcome to come back and speak with Banking Exchange.

Be sure to read every installment in our four-part interview series:

SAS Executive Stu Bradley Discusses 2024 Anti-Fraud Report and Its Findings

• First Installment
• Second Installment
• Third Installment
• Fourth Installment