The financial technology (fintech) industry has brought several financial services to our fingertips. We now can transfer money while sitting on our couch thanks to fintech services. However, the frequency of financial crimes has also increased. Financial crimes can land an organisation in a tough spot. Not to forget, a financial institution also loses its reputation due to fraudulent activities. To combat financial crimes, banks and fintech providers impose round-the-clock surveillance. Among all the surveillance practices, communication surveillance is a crucial task for an organisation. Often, organisations look for third-party solutions to ensure round-the-clock surveillance. Read on to know how communications surveillance brings capital securitisation.
Understanding communications surveillance
Leading banks and fintech firms must ensure communications surveillance. This is because there are compliance norms to ensure surveillance within an organisation. A company can be penalised if it violates the compliance rules related to surveillance. These rules are to keep a check on malicious actors so that they do not hamper the industry or economy. Communications surveillance is the monitoring of electronic messages or information shared over a network. It can include monitoring social media forums, emails, chat rooms and other communication channels. It is done to detect any breaches that can lead to the misuse of information or loss of capital.
As more digital services are offered to customers, the risk of financial crimes is even higher. Social media integration into financial services alone has created a path for malicious actors. Conversations on encrypted platforms such as WhatsApp go under the radar. A bank or fintech organisation must monitor communications between different departments. They also need to know the ways employees communicate with customers. User activity in chat rooms and social media platforms must also be monitored, because a breach can occur from anywhere and hamper the firm’s reputation.
Firms install a communication surveillance system to monitor all types of communication within the organisation. Often, firms lack the expertise to establish an effective surveillance system. For this reason, they rely on third parties to collect and report communication data within the organisation. Third parties that offer securitisation services use new-age technologies to detect breaches proactively. Here is how communications surveillance can lead to capital securitisation:
Capital securitisation with communications surveillance
A breach can occur from any digital channel, even though chatbots. A financial institution needs to know what is going on within the organisation at all times. With round-the-clock surveillance, firms can prevent malicious actors from stealing their money or sensitive information. Communication surveillance brings capital securitisation in the following ways:
- Technology-based investigation
To use any financial service, one has to offer some details to the provider. For example, before using fintech platforms, one has to go through the Know Your Customer (KYC) verification. For KYC verification, a user will offer some identity cards, documents or personal details. Customer Due Diligence (CDD) is another practice that can offer useful details to the provider. When frauds occur, the provider can use the previous communications from the user to know more. For example, a fintech platform might know the name and address of the person who has committed fraud.
The above types of surveillance do not need a human element. With automation, one can easily collect communication data across channels. For example, a fintech platform can automatically ask new users to upload their identity cards at the start. However, the problem with such investigations are that they occurs after a fraud has been committed. Once frauds occur, the provider backtracks and finds any information shared by the user. Therefore, to enhance capital securitisation, proactive threat detection is needed.
- Proactive threat detection
Currently, firms are investing in proactive threat detection. An artificial intelligence (AI)/machine learning (ML)-led system is used to determine a breach even before it has occurred. The communication surveillance system will provide the AI/ML-led system with data. The system will try to find unusual patterns within the communication data. If any suspicious message is replayed or shared, the system will send an alert to the respective team.
A surveillance system will help a financial organisation maintain SARs (Suspicious Activity Reports). As per financial regulations, firms are required to maintain SARs. Protect your capital in 2022 by minimising financial crimes!
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