Financial institutions (FIs) operate in a high-risk environment where fraud is an ever-present threat. According to PwC’s Global Economic Crime and Fraud Survey, 51% of surveyed organizations reported experiencing fraud within the past two years, marking the highest level in 20 years of research. These incidents resulted in total losses amounting to $42 billion annually, underscoring the significant financial impact of fraud, with the financial industry being one of the hardest hits. In response, analytics has emerged as a crucial tool for mitigating fraudulent activities. However, the growing complexity of fraud identification necessitates specialized expertise and resources that many FIs may lack in-house. This is where outsourcing analytics for fraud prevention becomes a game-changer.

Fraud in the financial industry takes various forms, including identity theft, payment fraud, insider trading, and money laundering. The Federal Trade Commission (FTC) reported 5.7 million fraud cases in 2023, amounting to over $10 billion in losses-a sharp increase from previous years. With traditional fraud monitoring methods struggling to keep up, FIs must adopt proactive and data-driven approaches to safeguard their assets and customers.

1. Identity Theft: Fraudsters use stolen personal information to open accounts, secure loans, or make unauthorized transactions.

2. Account Takeover (ATO) Fraud: Criminals gain access to an individual’s financial accounts to make fraudulent transactions.

3. Payment Fraud: Involves credit card fraud, wire fraud, and unauthorized digital transactions.

4. Insider Fraud: Employees exploit their access to financial systems for personal gain.

5. Money Laundering: Fraudulent layering of funds to disguise illegal financial activity.

Rather than maintaining an in-house analytics team, outsourcing fraud analysis provides several advantages:

1. Optimize Costs & Resources
Running an internal fraud analytics team requires substantial investments in:

• Hiring & Training – Skilled data scientists, fraud analysts, and regulatory experts demand high salaries and continuous training.
• Infrastructure – Setting up an in-house analytics platform involves high maintenance costs for servers, security, and compliance software.

Outsourcing allows FIs to access top-tier fraud prevention experts at a fraction of the cost while eliminating expenses related to technology upkeep.

2. Enhance Accuracy & Consistency

• Fraud monitoring requires meticulous oversight to prevent false positives and ensure real threats are not overlooked.
• Outsourced analytics service desks utilize specialized fraud models and train professionals to minimize errors and enhance data integrity.

By leveraging an experienced fraud analytics team, FIs can ensure consistent and high-quality fraud identification without disruptions.

3. Relieve Internal Teams

• FIs often struggle with conventional, time-consuming fraud monitoring tasks that burden their in-house teams.
• Internal fraud teams can focus on more strategic risk mitigation efforts by outsourcing repetitive and complex data processes.

This improves operational efficiency while ensuring fraud observation remains a proactive, 24/7 function.

4. Ensure Compliance & Security

• FIs are subject to strict regulatory requirements such as GLBA (Gramm-Leach-Bliley Act).
• A dedicated fraud analytics service desk ensures regulatory compliance by maintaining detailed, audit-ready documentation.

With fraud laws evolving frequently, outsourced teams help FIs stay compliant while mitigating risks of penalties and fines.

5. Improve Operational Oversight

• A dedicated analytics service desk provides monitoring and reporting on fraud-related activities.
• FIs can gain greater transparency into fraud monitoring workflows, transaction monitoring, and risk assessments.

This centralized oversight allows FIs to respond to fraud threats faster while controlling critical fraud prevention processes.

Fraud is a persistent and evolving challenge for FIs. FIs can reduce costs, enhance accuracy, ensure compliance, and improve operational efficiency by outsourcing fraud monitoring to a specialized analytics service desk.

Quinte’s Analytics Service Desk offers a comprehensive fraud prevention solution, providing:

• Expert fraud analysts to identify and mitigate threats.
• Advanced data monitoring for fraud uncovering.
• Regulatory compliance support with audit-ready documentation.
• Cost-effective outsourcing model to optimize resources.

With Quinte’s expertise in fraud analytics and compliance, FIs can stay ahead of fraudsters, minimize losses, and strengthen risk management strategies.

1. What types of fraud are most common in financial institutions?
Common fraud types include identity theft, account takeover, payment fraud, insider fraud, and money laundering.

2. Why should financial institutions outsource fraud analytics instead of building in-house teams?
Outsourcing offers access to expert analysts, reduces overhead costs, and ensures consistent compliance without the burden of infrastructure and staffing.

3. How do analytics improve fraud monitoring accuracy?
Analytics uses data-driven models to identify patterns and anomalies, reducing false positives and improving fraud monitoring accuracy.

4. Can outsourced analytics services help with compliance requirements?
Yes, specialized analytics service desks maintain audit-ready documentation and ensure FIs comply with regulations like GLBA.

https://www.pwc.com/gx/en/services/forensics/economic-crime-survey/2022.html

https://www.acfe.com/about-the-acfe/newsroom-for-media/press-releases/press-release-detail?s=2024-Report-to-the-Nations

https://www.ftc.gov/news-events/news/press-releases/2024/02/nationwide-fraud-losses-top-10-billion-2023-ftc-steps-efforts-protect-public