SAS Roundtable Highlights Strategies To Combat Financial Fraud

Fraud has become increasingly sophisticated, posing substantial risks to financial institutions through scams that exploit human behavior. Social engineering tactics deceive individuals into divulging sensitive information or initiating fraudulent transactions, leaving minimal opportunity for intervention.

A Forrester and LexisNexis study revealed that 52% of frauds in the EMEA region stem from digital channels. Within Saudi Arabia, the cost of fraudulent transactions in financial services and retail has surged by 4.56x and 3.10x, respectively, exacerbating financial losses and compliance burdens.

To tackle the growing threat of fraud and develop effective prevention strategies, SAS, a leader in analytics, partnered with Intel to host a roundtable discussion titled “Leveraging Social Engineering Awareness for Fraud Prevention.” The event was organized by the Information Security Media Group (ISMG).

Senior leaders, such as fraud risk managers, and IT executives from various financial institutions in KSA, participated in the roundtable. They exchanged perspectives on the escalating challenges in fraud, discussed leveraging AI to address compliance mandates like SAMA Counter Fraud Framework, and deliberated on emerging trends in fraud prevention.

The event brought together financial practitioners and subject matter experts to address the critical challenges of educating internal stakeholders and customers about the sophisticated social engineering tactics employed by fraudsters. The insightful discussion was led by Amit Kumar, Practice Lead for the META region at SAS, and Grozdana Maric, Head of Fraud and Security Intelligence for EMEA Emerging Markets and AP at SAS.

Challenges in Compliance and Fraud Prevention

The discussion highlighted regulatory challenges set by the Saudi Central Bank (SAMA), which mandates robust fraud prevention frameworks. Practitioners and experts acknowledged the complexity of compliance, noting the need for adaptable solutions to keep pace with evolving fraud tactics. 

Participants identified key challenges including managing siloed data, implementing real-time fraud detection solutions, and addressing the skills gap in fraud prevention. 

Adapting to Evolving Fraud Tactics

Participants emphasized that no single solution exists to combat fraud effectively, given the constantly evolving methods employed by fraudsters. Device profiling, as mandated by SAMA, emerged as a critical strategy for improving fraud detection and reducing false alerts. Additionally, collaboration between fraud, compliance, and cybersecurity teams was underscored as essential for enhancing response effectiveness. 

Key Takeaways from the Roundtable 

• Raise Awareness About Social Engineering: Financial institutions should prioritize customer education through awareness campaigns, leveraging techniques such as short training videos and gamification to help customers identify fraudulent communications. 
• Specialized Roles in Fraud Prevention: Banks must invest in specialized roles, including fraud investigators, risk managers, and compliance specialists, to counter the rising volume of attacks. 
• Flexible and Adaptable Solutions: Fraud prevention frameworks should be flexible to accommodate regulatory changes and emerging threats, with swift updates to address vulnerabilities. 
• Effective Profiling: Profiling devices, applications, and customers for both monetary and non-monetary transactions can improve fraud detection and reduce false positives. 
• Integrated Data for Comprehensive Insights: Siloed data, such as device IDs and IP addresses, must be integrated with core banking systems to enhance fraud detection capabilities. 
• Model Creation Using Synthetic Data: Developing and testing fraud detection models with synthetic data can improve resilience and adaptability to unknown scenarios. 
• Collaboration and Communication: Sharing threat intelligence and incident reports across teams fosters effective collaboration and ensures a cohesive approach to fraud prevention. 

The event underscored the importance of proactive measures, advanced analytics, and collaboration in combating modern-day fraud, paving the way for a more secure financial ecosystem in Saudi Arabia.