Hyas Blog | It’s Fraud Prevention Month. Do You Have the Infrastructure Intelligence You Need?

As we observe Fraud Prevention Month this March, it's imperative for financial institutions, and anyone who deals with people and the potential for deception, to reassess and strengthen their defenses against the ever-evolving landscape of fraud. Traditional methods, while foundational, often fall short in detecting sophisticated schemes. To stay ahead, organizations must delve deeper into the digital footprints of both their customers and potential customers, leveraging infrastructure intelligence to proactively identify and mitigate in advance downstream fraudulent activities.​

The Evolving Landscape of Financial Fraud

The financial sector has always been a prime target for cybercriminals, for obvious financial gains. As security techniques and KYC (Know Your Customer) policies generally improved, the tactics employed have evolved, with adversaries exploiting advanced technologies and intricate networks to perpetrate fraud. Recent reports indicate a significant uptick in fraudulent activities, underscoring the need for more robust preventive measures.​  One simply needs to look at data points like Mastercard’s $2.65B USD acquisition of Recorded Future to understand the gravity of the situation and the need for advanced intelligence to combat fraud.

The Imperative of Knowing Customers Beyond the Surface

Traditional Know Your Customer (KYC) protocols focus on verifying the identity of clients through documentation and personal information. While essential, this approach often falls short in detecting sophisticated fraud schemes. However, with the vast majority of fraud happening electronically, the use of Internet infrastructure and various devices is always at the heart of any sophisticated fraud scheme.  By integrating infrastructure intelligence, organizations can gain a more comprehensive understanding of their customers' digital behaviors and associations, and get proactive against this onslaught of fraud instead of trying to detect it either in real-time or, worse, after it occurs.

Leveraging Infrastructure Intelligence for Proactive Defense

Infrastructure intelligence involves analyzing the digital footprint associated with customer activities, such as IP addresses, domain registrations, devices, locations, network patterns, and other indicators or IOCs. This analysis can reveal anomalies and connections to known malicious entities, enabling institutions to:​

• Identify Suspicious Patterns: By monitoring network behaviors and associations, organizations can detect irregularities that may indicate fraudulent intentions.​
  
  
• Preempt Fraudulent Account Creations: Understanding the infrastructure behind account registrations can help in identifying and blocking potential fraudsters before they gain access.​

Enhance Transaction Monitoring: Real-time analysis of transaction infrastructures allows for the swift identification and prevention of fraudulent activities.​

Case in Point: Collaborative Efforts Yielding Results

A notable example of leveraging infrastructure intelligence is the recent collaboration among major Australian banks. By sharing data on suspicious account infrastructures, these institutions have enhanced their ability to detect and prevent fraudulent transactions, showcasing the effectiveness of a proactive, intelligence-driven approach.​

In other scenarios, a European bank that I recently worked with compared a list of known fraud that occurred in previous months with the unique infrastructure intelligence in HYAS Insight and concluded that, had they utilized the knowledge in HYAS Insight proactively, they would have been able to significantly reduce the downstream fraud that occurred, saving both significant time and money.

Conclusion

In the ongoing battle against financial fraud, traditional defenses must be augmented with advanced infrastructure intelligence. By deeply understanding the digital infrastructures and devices associated with customer activities, institutions can move from reactive responses to proactive prevention, safeguarding their assets and maintaining trust in an increasingly digital world.