The in-house technology employed by Starling Bank gives the digital-only challenger great advantage over their incumbent competition when it comes to reacting to fraud.
That’s according to the bank’s head of fraud, Catherine Walpole - who was speaking yesterday on a bobsguide webinar.
“All the in-house technology that we can employ does have its advantages over the legacy banks, allowing us to react really quickly to trends - and mitigate them,” said Walpole.
Joining Walpole on the panel, Daniel Greiller, financial crimes specialist at anti-fraud vendor, Feedzai, suggested incumbents could do more.
“Some of the legacy players will have challenges to react quickly because they’re sitting on huge, outdated tech stacks,” he said. “But by the same token they have a huge wealth of data, multiple different touch points so, in some ways, they better understand their customers.”
Despite the pace of fraud change both Greiller and Walpole were quick to associate it with the human element.
“With the advent of new technologies, fraud has moved from one place in transactional fraud to elsewhere in the lifecycle a customer, so account opening and takeover fraud are both increasing due in part to the human element; the human is the weakest chain in the link,” said Greiller.
A recent report from UK Finance points the finger at data breaches and social engineering as fraudsters’ main tools. The report revealed a 16% increase between 2017 and 2018 in unauthorised payment card, remote banking and cheque fraud - some £844.8m.
The figure for authorised fraud losses - ie fraud where the consumer unwittingly processes the payment - amounted to £354.3m, a 50% increase on 2017.
Walpole believes education is key and compliments the challenger’s communication method.
“We need to ensure we’re consistent and reliable while being customer centric and transparent - we try to talk to customers in their language without using bank jargon and this helps educate and bring in that human factor.
“Examples of this are our notifications and the way we preempt things, particularly thinking about high profile merchant data breaches of BA and ticketmaster; we’re able to react quickly to these and communicate really clearly with our customers while our technology can issue cards quickly. We can have the best tech on our side but if you don’t educate your customers are still vulnerable; this is an industry wide responsibility,” she said.
Listen to the full webinar here - Trust and growth: A leading challenger bank’s perspective on fraud