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August 23, 2017
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How One Fraudulent Checking Account Costs Banks Millions

With inefficient processes and millions of dollars in losses, banks are forced to protect themselves against new forms of fraud every day. Identifying applications that are high-risk before they become big problems is critical for every leading retail bank.

Money Mismanagement

When we fill out an application for a bank account, we don’t think about the millions of other applications the bank is responsible for processing and approving. While we might not think about fraud on our end, the bank does not know us from any of the other millions of applicants. More than that, the amount of data that must be analyzed in a short amount of time leaves banks susceptible to people trying to take advantage. Far too many banks have learned the hard way that not managing the data from these applications leads to high-risk accounts overdrawing and mismanaging money.

With the right analytics and data solution, banks can identify these high-risk applications from their poor banking histories. Just as consumers are demanding more control over their money management systems and expect fraud detection alerts before a person with ill intent accesses their account, banks are just as proactive in preventing fraud from ever entering their doors. This boils down to having the right data, at the right time. Banks have to make difficult decisions on whether or not someone will potentially cause damage to its business and their customers. It’s not just the business that loses out, as the customers who responsibly manage their money have to bear the brunt of these malicious schemes.

Needle in a Haystack Applications

Companies that leverage Hortonworks not only gain a sense of security in protecting themselves from fraud, but they also save themselves millions of dollars in protecting the business. Hortonworks Data Platform empowers banks to collect, store, and analyze data streams to provide to regional bank managers. Mining down to this level of detail puts the power back into the business to identify problems where they exist at the local level and much quicker. The bank managers can then apply predictive analytics to control the financial risks in their individual branches. Being able to make decisions based on the information presented at the time of decision not only prevents fraud, but improves the customer experience for innocent customers who are just simply trying to open a savings account.

These kinds of use cases are not unique or atypical, as banks deal with these challenges with every application they receive. The true power comes in and offers banks differentiation is being able to identify patterns and update policies over time based on the accumulation of data and instances where they could detect an issue. With Hortonworks, banks are able to create algorithms that begin to detect nuances that a risk analyst might not catch. The right data empowers bankers with more information and better tools to mitigate potential issues. With predictive analytics, banks no longer have to worry about the potential needle in the haystack fraud problem.

For more information on how to leverage Big Data in the financial services industry to minimize risk for maximum benefits, visit us today.

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