Jayaraj Puthanveedu - MD, Global Head of Resilience, Cyber, and Digital Fraud of BNP Paribas - dives into fraud, what the landscape looks like for financial firms, its impact on customer trust, tips on customer awareness, and much more.
Notes from our Discussion with Jayaraj
Fraud Landscape for the Customer
Fraud is of utmost importance for the financial sector. It is increasing in both complexity and magnitude. Only about 20% of fraud is reported, making it more difficult to measure it.
Rising Agility of Fraudsters
Fraudsters respond very quickly to changing situations. Now they can leverage AI, which makes it even more difficult for customers to recognize suspicious sites or activities. Neither individuals nor the largest organizations are immune to fraud.
Which Customers are Most Susceptible to Fraud
Fraudsters are enterprise businesses now, which operate across countries. It’s easier to target the older, less tech-savvy generation. Fraudsters have data analytics to profile customers and evolve their targeting strategies. They also adapt to different themes, like the cost-of-living crisis.
Impact of Fraud on Trust in the Financial Sector
Financial institutions focus on securing their own infrastructure, their websites, applications, assets and information. There’s a need to be external looking and protect customers. It’s challenging to keep customer’s data and money safe, while ensuring they have access to banking services when they need it. Building trust is about creating communication protocols to raise awareness and train customers.
Considerations When a Customer Becomes a Victim of Fraud
Even if a bank does everything right, a customer who is defrauded may lose trust. Banks need to think beyond the regulatory aspects and encourage customers to report fraud and train them to know when, what and how to report it. This helps financial institutions to understand the latest modus operandi of perpetrators in cross-jurisdiction fraud. Also, the fund recall process has become far more complex because the money moves quickly between countries.
Fraud Proof by Design
Financial firms need to follow a holistic approach to building machines, processes and products to detect non-standard behaviors and patterns. Fraud prevention must be a consideration in application development, product design and delivery. Intelligence gathering is also important, like identifying websites that look like your own to reduce phishing.
Getting Customer Attention to Increase Fraud Awareness
Despite the rapid evolution of fraudulent activities, banks cannot communicate too frequently, as customers will just tune out. Awareness needs to be part of the customer journey, from onboarding to the transaction process and account maintenance. Sometimes personal data is stolen on other websites, but customers don’t get to know till their bank account is impacted. Customer awareness of different ways in which data may be compromised is key. Customer education is better driven by contextualizing the message.
Collaboration to Get Ahead of Fraudsters
There’s a need to share actionable intelligence and information on trends and patterns. There is currently no central or global data source to understand the real loss from digital fraud because it is hugely underreported. There needs to be regional and international coordination to tackle fraud.
Privacy Issue with Sharing Fraud Data
Fraud reporting may not require sharing customer specifics but will definitely include customer profiling. There are privacy issues with this as well. Conversely, there are things that can be shared that are not yet being shared.
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Jayaraj Puthanveedu (more easily known as Jay) has 25 years of industry experience in the fields of Risk Management, Cybersecurity, Technology Risk, and Resilience. Currently, he is in charge of Resilience, Cyber...Read More
& Digital Fraud, and Third Party Technology Risk at BNP Paribas Group. In this role, Jay spearheads strategic initiatives to fortify the organization's resilience against rapidly evolving threat landscape. His responsibilities include developing and implementing robust risk management frameworks, collaborating with cross-functional teams, and driving transformation efforts in the areas of operational resilience, cyber, tech risk and digital fraud topics while ensuring regulatory compliance. In the past, Jay has held various leadership and senior technical roles in Goldman Sachs, Deutsche Bank and Northern Trust. With a strong focus on building resilient and secure systems, combined with a deep understanding of financial services challenges, Jay has been instrumental in implementing best practices, execute comprehensive risk management strategies and driving continuous improvement across large organizations. He is a member of FS-ISAC's Europe Board of Directors and actively contributes to the industry, sharing his expertise and insights to drive meaningful discussions and shape the future of cyber, tech risk, anti-fraud and resilience topics.
Elizabeth is a storyteller at the intersection of technology and money. Layer in geopolitics and the criminal underworld and you get today's issues in cybersecurity for the global financial system. Crypto. Web...Read More
3.0. Quantum. AI. Ransomware. Privacy. Regulation. Zero-days. Supply chain attacks. Developing new and diverse talent. How to protect the future of money. These are the topics Elizabeth asks top executives and experts in the field about on FinCyber Today.