loan servicing software community bank small business


The defi Team defi INSIGHT, Fraud

banking fraud detection software

Advancements in banking fraud detection software integrated into core systems has given institutions the tools to protect themselves and their customers from fraud. With seismic enhancements in fraud detection software, banks can now catch fraudsters quicker while improving the flow of non-fraud borrowers. We’ve detailed the reasons why financial institutions should upgrade, along with eight fraud detection software must-haves for your organization.

Fast, Reliable Fraud Detection is a Must 

Technological advances have been both good and bad news for the financial services industry. On one hand, better software and technology means that banks can offer a greater number of online services and make the process more streamlined and convenient for customers. On the other hand, there are more ways to commit fraud.


Bank staff very rarely have face-to-face interactions with customers anymore. In the past, customers had to visit a branch in person to deposit checks. Today, almost all institutions offer a mobile deposit option to customers so they can fund their accounts from anywhere with an internet connection. 


While this has made the deposit process more convenient, it’s also a potential liability for the bank. The mobile deposit software must be able to detect some of the hallmarks of a fraudulent check, like smooth edges, fake logos, false check numbers and MICR lines, suspicious signatures, or other irregularities. These are qualities that bank tellers are trained to spot, but it becomes harder to catch these minor details when customers deposit checks online. 


The introduction of online banking has also led to internet-specific banking schemes. Fraudsters can create a false banking website or merchant page to trick customers into giving out their credit card or bank account information. 


These are only a few of the potential schemes a fraudster might use to steal money or gain something at the expense of the bank and its customers. Criminals are constantly drafting up new ways to game the system. 


Technology also helps banks prevent fraud. Institutions can identify the most common fraud schemes and use computer algorithms to flag suspicious activity the moment it happens. The best banking fraud detection software is even better at identifying and preventing fraud than humans. It finds hidden patterns in financial data and automatically prevents suspicious transactions or activity before fraud can happen.

Integrated Banking Fraud Detection Software: Eight Qualities to Look For 

To prevent your institution and customers from becoming victims of fraud, you should use the most advanced banking fraud detection software. These are all must-haves:


  • Secure data storage: The software should have access to as much high-quality data as possible to accurately identify patterns and trends.
  • Rule-based analytics: The banking fraud detection software should come with a set of rules for flagging some of the most common banking schemes.
  • Customizable rules: The best software takes a rule-based system to the next level by allowing banks to incorporate their own rules into the system based on patterns or trends they’ve identified.
  • Detailed risk assessments and risk profiles: In addition to rule-based analytics, the software should also include profiles and other assessment matrices that let banks flag would-be fraudsters before they commit fraud.
  • Ad-hoc and real-time analysis: The banking fraud detection software should perform analysis in real time or on-demand so that banks can shut down fraudulent activity or take other immediate action.
  • Actionable insights and communication: If fraud is suspected, the software should automatically notify everyone who can take action or, at a minimum, require an administrator to sign off or override certain actions.
  • Machine learning and artificial intelligence (AI): Predictive analytics is essential for detecting fraud. The software will improve its ability to spot fraud as it learns from past trends.
  • Advanced statistical analysis: Anomalies in the data always receive greater attention, as they may be an indicator of fraud.

These are just a few must-have features that your banking fraud detection software should include. Ultimately, the most important quality is whether the software can be tailored to the needs of your financial institution. The ability to customize a system to fit staff workflows, your customers, and your services will help you detect more incidents of fraud than if you were to use more generic software.

How to Protect Your Financial Institution 

The number one cause of banking fraud is lack of information. With the right data analytics tools, banks can detect even the most seemingly-polished scheme. That’s because even the most savvy criminals still leave some form of a paper trail or other clues behind that expose the scheme. The difficult part is finding the right technology to detect this trail of clues. 


Modern banking fraud detection software can be configured to hunt down fraudsters by leveraging mountains of data. Digging through detailed financial records and customer profiles is an extremely time-consuming process for staff and is prone to human error. But with advanced software, banks can perform this analysis in just moments, with a sophisticated degree of accuracy. 


You can program custom banking fraud detection software to look for signs of credit card skimming or altered checks. You can also use the software to look up your customers’ financial histories and flag suspicious invoices, transactions, or requests for new credit or debit cards. This prevents losses and gives you the information you need to take more proactive steps such as closing security vulnerabilities and financial loopholes. 


Customizable and innovative banking fraud detection software does more than just protect the interests of your financial institution. It also protects honest customers and increases their trust in your bank. Your customers will rest easy knowing that their financial data and money is safeguarded by the most advanced computer algorithms and a caring staff of banking experts.


Getting Started

defi SOLUTIONS offers a wide range of choices in integrated n banking fraud detection software. If you’re ready to close security loopholes in your system and protect your bank against fraud, contact our team today or register for a demo.


Get in touch with us today and get a demo!


(Visited 471 times, 1 visits today)