In 2023, it’s commonplace to use fraud detection software in the fight against scammers. Not only are manual processes insufficient, but working with technology allows finance teams to keep a closer eye on their payment accounts. The thing is: there are so many options and it can feel overwhelming to choose the right one. Making the wrong choice would be a complete faux pas – the risks of fraud are too big to bear. As they say, “buy cheap, buy twice”.
In this piece, you’ll learn about the most important fraud detection software features to look for, and how to assess them so that you know you’ve chosen the right fraud prevention solution for your business.
For more advice on how to handle your fraud prevention project successfully, download the ultimate fraud guidebook!
Why is fraud detection software important for businesses?
Fraud could be the single biggest threat to business operations today. In fact, 70% of organizations actually experienced a cybersecurity attack during the pandemic.
Falling victim to it, no matter how small, can completely shut down your operations, requiring a full-on audit, risk assessment, and overhaul of processes. Undetected fraud can leave your business out of cash, and out of ideas.
When you consider some other prominent risks when running a business, such as broader economic uncertainty or employee retention, nothing compares to the effect that fraud has on operational resilience.
But you can proactively eliminate fraud (because fraud detection software removes the risks).
Manual fraud detection can be hugely time-consuming and tedious – taking a minimum of thirty minutes to check the bank information of a single supplier. Imagine, then, that you have thousands of suppliers and have to check each one manually in order to try to detect fraud.
Instead, implementing anti-fraud software can automate the process down to just two minutes. It’ll empower your employees to make better decisions and feel confident in the workplace. That’s exactly what happened at Sade Telecom, who reported “more reliability and peace of mind” after investing in fraud detection and prevention software.
Top Features to Look for in Fraud Detection Software
Fraud detection software works by verifying the accounts of your suppliers throughout the entire payment chain. By working in real-time, it has the ability to stop fraudulent transactions as they are attempted.
We’ll break down some of the most important features of fraud detection software so that you can understand and assess which option is best for you.
- Real-time monitoring
- Machine learning algorithms
- Multi-factor authentication
- User-friendly interface
- Geographical account coverage
- Customizable alert settings
- Integration with other systems
- Customer support
Real-time monitoring in your fraud detection software
Real-time monitoring refers to software that continuously tracks updates and changes to your vendor profiles, performs transaction monitoring and checks account changes in financial institutions. It’s important because this feature can help your business establish a ‘normal’ range for transactions, and start alerting any anomaly for investigation, instantly.
The key benefit of real-time monitoring is two-fold:
- It removes the manual nature of account surveillance which saves employees time and largely prevents any manual errors
- It means that your team can react immediately upon being flagged of a suspicious activity or transaction, which can mean the difference between becoming a payment fraud victim and fighting back
Before working with Trustpair, Dehon Group found its fraud protection measures unreliable. The team couldn’t check supplier details as they had zero visibility over changes that were made to vendor profiles.
However, implementing fraud detection software now allows the organization to check over 100 IBANs every single month, with an average time of just 2 minutes per check. What’s even more valued at the company, though, is that these checks produce 100% reliable data. Fraud risk management is completely taken care of, and the team has compliant records for examiners or an external auditor.
Machine learning algorithms
Machine-learning algorithms are rule-based actions that can be applied to your supplier profiles. Each software has its own rules. For example, Trustpair’s controls go through several layers of checks to give a status and level of risk for each payment attempt or supplier.
Moreover, fraud detection algorithms also help with fraud mitigation by assessing threat intelligence and reducing false positives. Most of the time, you’ll struggle to get fraud losses back. So the best financial fraud detection software operates rule-based actions to remove emotional bias and reduce the risk around customer data.
Multi-factor authentication
Multi-factor authentication can be built in as an additional measure to anti-fraud software. It’s also sometimes known as two-factor authentication.
Regulated entities follow the likes of ‘Know Your Business’ legislations by performing identity verification, authenticating third parties, and building a knowledge profile around them. This security feature is also great for card fraud prevention, which costs businesses $50 billion per year.
However, in case fraudsters can somehow bypass these security systems, multi-factor authentication offers a second stage of security that is harder to get through. This helps you to detect fraud before the fraudster goes through a chargeback or runs away with the money. A good banking fraud detection software requires the account holder to input at least two of the following three log-in details:
- A known password
- A one-time passcode sent to one of their devices
- A biometrics confirmation such as fingerprint or facial recognition
For example, Keys Asset Management found it hard to secure third-party databases, but these were required for making payments to suppliers. By deploying a Trustpair connector to their database Allmybanks, payment signatories gained complete peace of mind over their data security and payments. Even though this adds a multi-factor authentication step, the overall manual workload is greatly reduced.
User-friendly interface on your fraud detection software
One of the most common barriers to entry when it comes to fraud detection software is that the program is difficult to use. But the customer experience matters!
For example, if the dashboard is super complicated, it can present a huge learning curve for your people. Plus, it might mean that you’re missing out on some of the software’s best features and expose you to being defrauded – simply because it’s so hard to explore.
Here’s what you should consider when it comes to the interface of your fraud detection software:
- Personalization: can you personalize the view to your taste and needs?
- Ease of navigation: can you move between different features or programs without having to open and close several tabs?
- Behavioral analysis: are your team following the workflow or do they need more custom settings?
- Data analytics: does the program show you the right information?
- Accessibility: can you give access to everyone you need and set limits based on user status?
Geographical account coverage
As part of the software, you’ll need to check the accounts of your suppliers. This means information on their bank details, legal disputes and more. If you’re an international business with vendors from all around the world, you’ll need to make sure the software also has global coverage.
For example, Trustpair offers worldwide thanks to a large access to external data sources.
Customizable alert settings
Consider whether your team can work remotely and still access their anti-fraud accounts. Can you customize the alerts to reach mobile devices from a cloud-based system, for example?
Integration with other systems, a must have for fraud detection software
It’s important to evaluate how a fraud detection system works with third-party programs.
Can you integrate in a smooth way to protect your payment chain from beginning to end? Or is the bank fraud detection software clunky, requiring manual processes and exposing your data to cybersecurity threats?
Specifically, consider whether your chosen fraud detection software can facilitate embedding with tools such as procurement, enterprise resource planning (ERP) and transaction monitoring system (TMS).
At Trustpair, we can integrate with just about any third-party system. Here are some of the data types we can enrich:
- Company information such as address or registration number
- Bank data such as branch, bank address
- Account data, such as verifying the owner of the bank account you’ll pay
As well as assessing whether your potential fraud detection software keeps third-party applications safe and secure, it’s worth noting how many integrations it can make. Every company operates differently, and if one of your systems isn’t included, it could be both time-intensive and expensive to find the right solution.
Customer Support to help you get the best out of your fraud detection software
There’s nothing worse than signing up to a new program and feeling like you’ve been dropped in the deep end. Or investing into a solution that doesn’t seem to be working properly.
Although underrated, customer support is actually an essential factor when you’re deciding between fraud detection software. During your enquiry stage, try to test out whether there’s adequate support from specialists with technical know-how. Plus, ask whether support is available 24/7 or if you’ll have to put your business on hold for hours on end until you can get someone to help you fix an issue.
How to choose the best fraud detection software for your business
At the end of the day, every business works differently. This means that what works for your competitors might not work for you. Equally, it’s important to find a program that suits your employees, since they’ll be the ones using it every single day.
Working with a good fraud detection software can be expensive, but the threat of money laundering, cybersecurity attacks and payment fraud still awaits. Investing in a high-end platform suited to enterprise companies means avoiding hidden costs and ensuring sustainability.
Fortunately, you can benefit from a free demo at Trustpair. Not only will this help you decide if this is the right fraud detection solution for your organization, but it’ll also show you how to make the most of the software.
Reach out to the team and get your Trustpair demo today.
In summary:
- Anti-fraud or fraud management software exists to reduce financial crime in business.
- Fraud detection software uses a combination of data mining, artificial intelligence, data analysis techniques, pattern recognition, and risk management.
- Reducing fraud is about working with data scientists to spot compromised accounts or anomaly transactions, as well as using predictive analytics to anticipate future attacks.
- Combating fraud by choosing the best predictive security platform can also safeguard your organization against internal fraudsters.
