One of the primary difficulties of successful fraud prevention is establishing rules that are strict enough to actually catch fraudulent activity (and ideally proactively prevent it), but are not so restrictive that they prevent customers from being able to use a platform with ease.
The rules built into a fraud prevention process need to be constantly iterated, and should even be flexible enough to apply to different types of customers in different situations. One of the ways this can be achieved is by incorporating a look-back review into the process.
What is a Look-Back Review?
A look-back review is the process of ‘looking back’ at the transaction activity of an individual to build a baseline of ‘normal’ activity, to determine if present activity by the same individual is fraudulent. Look-backs verify real activity, which helps identify present fraudulent activity.
Look-back reviews are essential in any fraud prevention process, as they help establish fraud system rules, and can even identify that an individual’s behavior is associated with sanctions targets or other regulatory and compliance violations.
How Does a Look-Back Review Enhance Fraud Prevention?
Proper transaction monitoring proactively identifies outlier events using built-in rules to indicate fraud. Part of this includes reviewing past transactions to establish baseline activity and determine when the current activity can be considered ‘abnormal.’
This is the first indicator that fraud might be occurring and should trigger a formal investigation within the platform to determine if there is any fraudulent activity. The best way to incorporate look-backs would be to utilize automated software that can analyze transaction information in real-time, and automatically flag any suspicious activities.
Incorporate Look-Back Reviews Into Your Process with Unit21
Adding a look-back review can enhance any fraud prevention process, and an all-in-one solution like Unit21 can help you analyze your fraud and AML data and identify which rules are the most effective. Schedule a demo today to learn more.