TransUnion urges banks to tighten fraud loopholes
Pauline Dikuelo | Friday August 21, 2020 14:48
TransUnion’s quarterly analysis of global online fraud trends found that the telecommunications, e-commerce and financial services industries have been increasingly targeted by online fraud.
Kabelo Ramaselwana, chief executive officer of TransUnion Botswana said the number of suspected fraudulent digital transactions increased by five percent between January to March and March to April. Botswana did not report any cases however, as the credit bureau noted that most transactions in the banking sector were still done manually.
“TransUnion identified more than 100 million suspected fraudulent transactions globally from March to April alone,” he said.
“This will mean banks and businesses need to deploy robust identity verification and fraud detection tools to manage their risks and avoid losses at a time when demand for credit is growing.”
Ramaselwana also said as banking transactions increasingly move online, fraudsters are taking advantage and companies have to adapt.
“Lenders and businesses need to know exactly who they are dealing with, and how to protect their genuine customers from fraudulent activities,” he said.
Ramaselwana said digital transactions carry an increased risk of fraud that businesses need to address through a multi-layered fraud strategy including assessing risk of digital signals like devices, emails, phones and behaviour.
“Rather than asking customers to manually enter their personal information, for example, ID documents can be validated online, and the information used to pre-fill an application. Once ID is established, the next step is effective ID Verification to detect and prevent fraud,” he said.
The spread of the COVID-19 pandemic across Africa has seen a surge in digital payments and e-commerce transactions as financial institutions scramble to offer businesses and consumers contactless ways of spending, borrowing and lending, and making payments.
Cashless solutions like mobile lending and digital payments were already growing rapidly on the continent even before the pandemic struck.
“Now, we could see a scenario where the effects of COVID-19 on our society will create permanent changes in the way Africans use cards and cash, creating both opportunities and challenges for financial institutions,” Ramaselwana said.
As growing numbers of consumers and businesses transact online, one of the biggest obstacles to the mass uptake of digital solutions will be security.
“This is where information providers like TransUnion are playing an increasing role in driving digital transformation, access to credit and financial inclusion,” he added.