How geolocation mapping can safeguard customers’ financial transactions

The customer is always at the centre of innovation.

New business propositions are being tested out almost daily to deliver services that provide engaging experiences and more convenience. Contactless payments are a great example of an innovation that has made customers lives easier. And with the Internet of Things now becoming a reality, the coming, connected years will see more personalised experiences where physical interactions with customers will rapidly decrease. This is good news for both banks and customers, however, it’s crucial to also consider the security of this new way of engaging with customers.

Image-(10)Mobile devices have become far more than just a personal gadget, they are with us right from the beginning of the day until we get in bed. And increasingly, customers are willing to provide their location data to banks in return for personalised services. To ensure that financial transactions are not fraudulent, customers are prompted to enter personal data, answer security questions, provide memorable information and frequently change passwords. While these initiatives aim to safeguard customers, they can conversely open up new avenues for fraudsters to steal personal identifiable data.

An emerging field is the geolocation based fraud prevention approach. This checks the exact location of the customer with the payment transaction origin. Checking the geolocation ensures that genuine transactions are not declined (based on other fraud prevention rules). Increasingly, it has been observed that this approach is cutting down on fraudulent transactions and most importantly, safeguarding customer interests.

Banks considering a geolocation based fraud prevention solution should take into account the following:

  • Data privacy requirements for each country, which may require explicit opt-in from customers
  • Making use of location services from telco providers to enhance the coverage
    Employing analytics to analyse payment patterns and deliver a personalised experience
  • Engaging telco providers to provide the proximity location data (to ensure that the exact location of the customer is not being tracked – even though technically possible

Geolocation based fraud prevention can also be further developed to perform SimSWAP checks that further mitigate the risk of fraudulent activity by using real-time data to check if a customer has recently been issued a new sim. In summary, while the rapid changes in operating models are offering new opportunities to fraudsters, they are also providing opportunities to banks to introduce tighter controls without compromising on customer interest, convenience and experience.

This article was originally published on The Digital Banking Club, August 21, 2015 and is re-posted here by permission. 

Anil Awasthi

Anil heads the retail banking practice at Virtusa where he is responsible for capability enhancement, solutioning, building best practices and thought leadership. With over 17 years of technology experience in the financial services industry, he is regarded as a true agent of change and digital innovation by clients worldwide. Anil is an ROI driven business leader who is passionate about faster products and platforms. His financial technology experience spans - API banking, blockchain, cards & payments, core banking, customer experience, digital banking, fintech and lending. From an IT perspective, his expertise lies in IT strategy, business architecture, technology rationalization, application modernization, data science, program governance and solution delivery. Anil is an avid writer who has been featured in the American Banker, Data Quest and The Digital Banking Club. Prior to Virtusa, Anil worked with Syntel where he was the Engagement Manager for a leading American Financial Institution. His other stints include a technical lead at IBM and an associate consultant at Ernst & Young. Anil holds a B.Tech in Computer Sciences from the Open University of British Columbia and is a certified CSQA, PMP, OCP and IBM Blockchain professional.

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