August 17, 2012–Small and Medium sized businesses (SMBs) have enough problems without falling victim to fraud. With large corporations doing everything in their power to shut out the competition, these businesses cannot afford to lose valuable resources, and far worse, the trust of their clients, due to criminal computer activity. This is an increasing problem in the financial industry as recently noted in the PR Newswire article “Independent study finds that financial institutions are losing clients as a result of a single fraud attack”.
According to the article:
“Year over year results show that SMBs are ongoing victims of account takeover and still piling up losses due to fraudulent ACH, wire and other transactions. The most revealing findings are that, as a result of fraud, SMBs are not only losing confidence in their financial institutions’ fraud prevention practices (30 percent of responses), but are taking some or all of their banking business elsewhere (40 percent)….The study revealed that 73 percent of online fraud attacks result in the successful transfer of money. Despite efforts by financial institutions to recover funds, 61 percent of reported fraud attacks result in lost funds.”
The financial industry has obviously suffered serious setback in the previous five years, and client trust is just now beginning to return to the pre-crisis norm. We believe data analytics can provide tools to reduce the occurrence of fraud and enable small to medium sized institutions to retain client trust. Digital Reasoning is one of the more exciting tech-companies currently working with the financial industry, and we applaud the work being done by these big data companies in the service of fraud detection and prevention.