In recent years, banks have aimed to prevent customers from falling for scams by ensuring their communications don’t resemble those of fraudsters. However, these strategies are now facing challenges as scammers begin to mimic legitimate bank practices.

A Message or a Scam?

Presently, banks request that customers provide their account numbers first when verifying communications. Alternatively, they ask for one-time passcodes over the phone. These steps mirror traditional scam tactics but are necessary to reduce fraud risk and ease customer interaction.

These practices are employed with the intention of simplifying reporting procedures for potential victims. Yet, these methods often lead customers to perceive even legitimate communication as suspicious.

Email vs. Text

The shift towards text messages for fraud alerts has made it harder for consumers and technology to differentiate genuine communications from scams. Short texts can be difficult to scrutinize effectively, compared to emails.

This transition means more potential victims are at risk as scammers leverage all available channels without leaving any gaps unexploited.

Confusing the Customer

While customer training to verify communications is crucial, it can also create conflicting signals. Customers who call their bank after receiving a suspicious message may end up confused when told by a representative that the communication is legitimate.

This confusion undermines trust and makes customers less likely to heed future warnings, potentially leading to greater financial losses or data breaches.

How AI Can Help

The advent of artificial intelligence offers a potential solution. AI can monitor customer behaviors and transactions to identify anomalies before triggering alerts tailored to the individual.

By personalizing alert communications, banks can enhance their effectiveness. For example, an AI message might say, “We noticed unusual activity from Saudi Arabia; is this you?”

Looking Worldwide for Solutions

Collaboration and international best practices are essential. Countries like Australia have developed scam-checking tools integrated into their banking systems, providing a framework that the U.S. should emulate.

To regain customer trust, banks need to work closely with regulators, social media platforms, telecommunications companies, and customers. This collaborative approach will help reduce fraud risks and improve overall security.