Being in the fraud department for a while now, there is no denying the fact that technology plays a vital role in fraud. After seeing how the day-to-day activities pan out with payment processing, customer interactions and with the many issues being faced with scams and fraud, there is no denying the fact that technology plays a vital role in it.
Scam, as I would put it without using any technical terms, would be the malicious misdirection of the use of your money. Simply put, someone somewhere wants to offer to you what doesn’t exist, and it could be in terms of product, service or impersonation. Fraud, on the other hand, is someone gaining undue access to your device through whatever means; either through a misdirected link or through social engineering where you have divulged critical information to a scammer that made them gain unauthorised access to your account to make payment.
Simply put, with a scam, you made the payment, but you definitely won’t get the required level of service for what you parted away your money for, while with fraud, you are not the one who initiated the transaction.
In today’s fast-paced digital world, the link between technology and fraud is no longer theoretical, in fact, it is a daily battlefield. While technology has revolutionised our customer experience, financial inclusion, and operational efficiency, it has also handed new tools to these fraudsters, pushing financial institutions to re-strategise on how they detect, prevent, and respond to financial crimes across the board.
Having spent years at the frontlines of fraud detection and training in one of the UK’s largest banks, I have witnessed both the evolution of fraud tactics and the tremendous power of technology to outpace them if and when used strategically.
Fraud is Getting Smarter, So Must We!
The traditional image of fraud which we grew up with like stolen credit card or forged cheque has since been replaced with increasingly sophisticated tactics such as phishing (the use of fraudulent emails, text messages, or websites just to trick people into sharing their sensitive data or by downloading malware which can expose people to cybercrime), vishing (the use of phone calls or by leaving voice messages impersonating reputable companies to deceive individuals to reveal personal information, such as bank details, debit card or credit card numbers), spoofing, synthetic identity fraud, and deepfake-enabled scams.
Fraudsters leverage automation, AI, and social engineering to exploit system loopholes and often target the most vulnerable users, the elderly or those with obvious vulnerabilities. This is not to say others can’t fall victim to it, but still, they target the most vulnerable users.
The role of fraud analysts is no longer just about blocking suspicious transactions but actively searching and identifying patterns, providing scam education to customers, and collaborating across departments. I have trained teams/individuals returning from long-term absence and maternity leave, bridging their knowledge gaps with updated fraud trends and system enhancements, because staying one step ahead is no longer optional, it is survival if we have to do right by our customers and of course, reduce the risk exposure of the bank as well.
Technology: The Sword and the Shield
Technology plays a dual role in fraud as it enables fraud, but it is also the strongest weapon against it. Today’s fraud detection depends heavily on machine learning, behavioural analytics, and real-time transaction monitoring systems. For instance, designed risk systems can now flag unusual activity, say, a customer who lives in Derby suddenly started attempting a high-value international wire transfer in and around let’s say London in Scotland, calls for attention, or an individual who is used to making certain transactions suddenly started making large sums.
However, the real game-changer lies in combining technology with human intuition, hence the job of fraud analysts who assess the information at hand and make an informed decision regarding it. Technology alone cannot interpret emotional cues on a call or detect subtle inconsistencies in a customer’s voice or behaviour, especially when conversations are being had regarding the transaction, and this is the key area where trained fraud analysts still hold the edge.
In my experience, integrating fraud detection systems with quality human coaching through active call listening, case reviews, and upskilling on various fraud trends and queues can lead to better accuracy and faster resolution where both the customer and the bank win together.
Deploying Technology Better: Key Recommendations
While we are armed with the tools, their effectiveness depends solely on how we deploy them. Here are strategies that institutions should consider:
- Data-Driven Coaching: There is a need to make use of data analytics not just to stop fraud, but to identify the knowledge gaps of agents and provide coaching plans where a knowledge gap is evident, as this gives room to have a smarter and confident fraud workforce.
- Proactive Education: AI-based systems can be used to give real fraud scenarios for training by simulation, which offers agents hands-on experience for them to identify red flags before they happen.
- Integrate Systems Across Channels: Fraud doesn’t live in silos as they say. There is a need for system integration. Systems used for email monitoring, transaction processing, and customer communication should be fully integrated for a 360-degree view of suspicious activity as that is the only way forward. Each system must work together to get the best out of it.
- Empower Customers Digitally: Many scams rely on customer ignorance because this is what scammers prey on. Interactive apps that simulate phishing attacks or highlight scam behaviours can help customers recognise fraud in the real world. There are now in-app contextualised questions (warning) that keep customers informed before they push a transaction through.
- Feedback Loops: Technology should not just block fraud, it should learn from each case, which is why giving scam education on various payments can actively help customers identify patterns in the long run. Deploying feedback systems, too, where fraud analysts can input scam types, response outcomes, and customer insights to continuously train fraud detection algorithms.
- Human-Tech Hybrid Teams: Establishing cross-functional fraud teams where we have part analysts, part technologists and part educators who can break things down and translate various insights into practical defences.
Conclusion: Building the Fraud Department of the Future
As fraudsters become more technologically advanced, financial institutions must respond not only with more technology but with smart, ethical, and customer-oriented strategies. At the core of any successful fraud department lies a synergy between automation and human oversight. Both must work hand in hand.
By investing in adaptive learning, continuous training by bridging the knowledge gaps, and systems integration with various systems working hand in hand in detections, we can turn fraud departments into centres of innovation rather than just waiting to react when fraud or scams happen. Technology is not a magic wand but when paired with empowered professionals, it becomes a formidable shield against fraudsters. The future of fraud prevention lies in agility, collaboration, and relentless innovation.