Fraud Management & Cybercrime , Fraud Risk Management , Video

Strategies to Combat the Hidden Threat of First-Party Fraud

First-party fraud is largely invisible. It requires financial institutions to overhaul their traditional fraud detection approaches. Unlike more commonly recognized forms of fraud, first-party fraud involves account holders acting deceitfully, which makes detection and prevention more complex, said Brad Crall, fraud consultant with Mission Omega, a mission-driven fraud services company.

See Also: Breaking Down Silos With a Holistic View of Security, Risk

Financial institutions generally have mature identity theft programs, but there is a growing need to have a more advanced enterprise-level solution encompassing all aspects of fraud including first-party fraud, Crall said.

"So, when we talk about it, it's identifying the goals of the program itself. Think about it from a framework perspective, assign roles and responsibilities to identify, first of all, what fraud is and define the taxonomy."

Banks need to be very clear and open about fraud so that they can align controls more effectively to identify various types of fraud, he said.

In this video interview with Information Security Media Group, Crall discussed:

• How to adopt a life cycle approach to fraud management;
• The crucial role of behavioral analytics in spotting fraud;
• The benefits of an integrated strategy with clear fraud classification and robust detection methods.

Crall has more than 13 years of experience managing advanced areas of fraud strategy, analytics, operations and claims. He previously served as senior vice president and senior financial crimes director for Fifth Third Bank.