• Global conflicts: The conflicts in Ukraine and the Middle East have the potential to be massively disruptive to financial markets. The global economy largely weathered the storm of the Ukrainian-Russian war, but the addition of the war in Gaza has created substantial uncertainty in financial markets with no sign of abatement on the horizon. 
• Recession potential: The signals are mixed about whether the current global soft economy will tip into an actual recession in 2024. Still, many financial services firms are taking a cautious approach to investment and hiring, anticipating the potential for the latter.  
• Commercial real-estate meltdown: Work-from-home was already accelerating pre-pandemic, and COVID put the pedal to the metal on this trend. Firms of all sizes have realized that they do not need the same square-footage of work space as they did prior to the pandemic, and the ensuing right-sizing is already beginning to wreak havoc on the commercial real-estate market.  
• Climate change: Climate change has been driving higher than anticipated claims on P&C insurers, putting pressure on premiums and leading executive teams to pursue more aggressive cost management strategies. Unfortunately, this trend shows no signs of abating in coming years, dictating the increasing need for technology to create optimization in P&C. 
• Inflation: Inflation remains a top-of-mind concern for many consumers and small businesses, even as it slowly abates in many geographies.  
• U.S. election: The U.S. presidential election in 2024 is likely to be just as turbulent as that in 2020, which will likely lead to equally turbulent times for financial markets. 
• Regulation: A vast number of pending regulations will create additional burdens on financial services firms if enacted. PSD3, CCCA, and section 1033 of Dodd-Frank represent just a small subset of the many pending regulations that could substantially impact the economics of financial services products. Datos Insights is closely tracking these and their impact on our client base.  

This confluence of headwinds is cause for concern, but there are many ways in which financial services firms can adjust and respond. Our Datos Insights teams have captured the stories and strategies that are being deployed and that look to be most successful (or not). We will be publishing advice on how to best navigate these rough waters in January 2024, and our advisory team is on call to help.

Please contact us at sales@datos-insights.com to learn more about how our team can support you during the turbulent times ahead.

The post 2024: Advice to Financial Services Firms for the Rough Waters Ahead appeared first on Datos Insights.

A powerful example of the potential of more deliberate collaboration among the financial services community as well as the public sector is Project Umbra. This workstream, one of many underway at The Knoble, is dedicated to improving financial institutions’ (FIs’) capabilities to detect online child sexual exploitation (OCSE).

It brought together FIs, law enforcement, and service providers to create a scalable and repeatable methodology. This methodology leverages financial crime risk and due diligence data in combination with each participating FI’s existing processes, as well as OCSE-specific training for investigators.

Participating banks included Scotiabank, U.S. Bank, Fifth Third Bank, and M&T Bank. In its first year, Project Umbra increased law enforcement referrals for suspected OCSE from participating FIs by nearly sixfold over the previous year, with false positive rates as low as 1.5:1.

This is just the beginning—phase two will entail expanding this successful methodology to other FIs, while honing it further. Not only does a success story like this mean making a very real difference in the lives of victims, but it is also a rewarding way to remind the analysts and investigators on the front lines of the valuable day-to-day work they are doing to help detect and prevent human crimes.

If you’d like to meet Ian Mitchell, founder of The Knoble, join him at Aite-Novarica Group’s upcoming Financial Crime Forum on September 19 in Charlotte, NC and learn about how you can become part of this worthy cause.

The post Collaboration to Protect the Vulnerable appeared first on Datos Insights.

I was buying something out of pattern—football tickets for an upcoming trip to London, since my son is a rabid fan of this particular football club. When my credit card was declined, I wasn’t surprised, since it was an unusual online purchase. As I expected, about 30 seconds later I got a text from my issuer asking if the transaction was mine. I responded “yes” and received a text response instructing me to resubmit the transaction. If my issuer had approved the resubmission, then it would’ve been a fine experience—I would have felt protected, and I would’ve had the tickets with no hassle.

I resubmitted the transaction. This time, unlike the last, the issuer initiated a 3-D Secure, stepped-up prompt. I must have red-lighted the first time, since I didn’t get a stepped-up prompt that time. After I input the one-time passcode (OTP), my issuer declined me AGAIN! Now, I was irritated.

I contacted the call center, and five minutes into the hold time, their fraud team called me about the transaction (using the same number that the OTP was sent to). The contact center rep authenticated me with knowledge-based authentication (UGH) and asked if the transaction was mine. I said yes. Even with all of that, the contact center agent didn’t have the ability to greenlight another resubmission of the transaction. She put me on hold for a couple of minutes to get her supervisor.

When she came back, she reported that her system wouldn’t let her escalate; she had to walk down the hall to get her manager to approve the transaction, and she would call me back. She called me back 15 minutes later, saying that if I reattempted the transaction, it would be approved—30 minutes after the initial transaction attempt. When I went back in to get the tickets I’d initially attempted to purchase, they were gone, and I had to settle for a less optimal location for our seats.

There are so many ways that readily available solutions could have made this a far better customer experience. We will be discussing how financial institutions can avoid negative outcomes like my situation and more at Aite-Novarica Group’s upcoming Financial Crime Forum on September 19 in Charlotte, NC. Please register here and come join the discussion!

The post Fraud Fail Translates to Awful Customer Experience appeared first on Datos Insights.