In 2022, the Canadian Anti-Fraud Centre reported a staggering $530 million in victim losses related to fraud and cybercrime — nearly 40 per cent more than what was reported in 2021.

The landscape of fraud prevention is constantly evolving to keep up with fraudsters’ ever-changing tactics. As financial institutions transition to faster payments systems and real-time functionality, they must also adopt new technologies and strategies to effectively mitigate the increasing fraud risk so many Canadians are experiencing.

At Central 1, we monitor new technologies closely and work with our clients and members to provide products and services that leverage technology and data to combat fraudsters, today and into the future.

“The advanced technology we’re using at Central 1 to further enhance our fraud capabilities is all about strengthening the overall credit union system,” explained Ron Kaine, Product Director of Enterprise Fraud Management for Central 1.” If we can make it easier and more accessible for our members and clients to detect and respond to potentially fraudulent activity, we can pass this level of security down to Canadians who bank with credit unions and other small financial institutions — something we’re all looking for some reassurance on.”

Unveiling behaviour patterns through data-driven intelligence

Our role in the Canadian credit union system centers on providing services and support tailored to the unique needs of credit unions. In addition, we’re able to collect and analyze large amounts of data which provide valuable insights that we’re able to pass back to those members and clients.

At the heart of this evolution are machine learning models. These models not only enhance fraud detection, but they also evolve with changing patterns to indicate fraud behaviour.  Innovations like generative AI (e.g. ChatGPT) are important to pay attention to as fraudsters are using it to create better targeted and increasingly compelling scams. As we move forward, Central 1 remains committed to staying at the forefront of this innovation to protect our clients and members.

Enhancing password security with advanced authentication measures

Passwords are one of the most common targets for fraudsters. Strengthening password security demands robust authentication methods, risk-based measures and behavioural analysis to detect anomalies.

Central 1 continually reviews and evaluates emerging technologies to enhance password security. We are actively exploring innovations like Passwordless Login, which is built upon the Fast Identity Online 2(FIDO2) standards developed by the FIDO Alliance to enhance online security and authentication. At the same time, continuous authentication and technologies like transaction step-up and behavioral biometrics (i.e., how people use keyboard, mouse and fingerprints) also help to ensure a secure and seamless user identification.

Central 1’s Enterprise Fraud Management (EFM): technology and expertise bring smart, future-focused solutions to life  

Fraud management is a core component of Central 1’s offerings, and it’s built on multiple layers of defense. We’ve implemented technology that enhances existing payment fraud detection capabilities and provides a more comprehensive protection for multiple payments transactions. Here are some of the key pieces we’ve implemented as part of our EFM offering:

• Artificial intelligence, which combines data and fraud experiences from all of our clients, to  payments.
• Real-time alerts allow financial institutions to swiftly investigate suspected fraud incidents and seamlessly report the results on the EFM platform.
• Fraud detection on multiple payment and money transfer methods — fraudsters target more than just electronic payments.

As part of our ongoing approach to protecting our clients and members, Central 1 will further enhance our fraud detection capabilities by introducing our pioneering AI fraud detection model into EFM— the first of its kind for the credit union system. We’re looking forward to working with our clients and members to continue enhancing fraud capabilities and helping to keep Canadians safe from the threat of fraud.

Explore more about Central 1’s fraud and cyber security solution: https://www.central1.com/cyber-security/