The Challenge
Fraud detection in real time
Not only leading financial institutions, but also smaller financial service providers face the challenge of detecting and preventing fraud with instant payments in real time. From August 20, 2024, the biggest Swiss banks will be available for instant payments in Switzerland, and by November 2026 this should be the case for all banks in Switzerland. It will then be possible to make any bank transfer in Switzerland in a matter of seconds: Transactions will be debited or credited to an account immediately. This raises certain challenges, as existing systems often do not provide the necessary speed and precision to immediately identify and block suspicious transactions. The still widespread legacy systems, which are written in outdated programming languages, present a particular problem here. This means that while instant payments pave the way for real-time payments, in combination with an outdated data infrastructure, they also pave the way for fraudulent activities.
the solution
One step ahead of fraudsters with data streaming and Kafka
A reliable strategy for fraud detection in instant payments is the collection and analysis of real-time data with a data streaming platform based on Apache Kafka. The first step is to analyze the existing system and data architecture, for which workshops with the relevant stakeholders have proven to be effective. This ensures that all relevant aspects of the process are taken into account and that the required data is included. Particular care must be taken when integrating into legacy systems: These usually use rare programming languages, which again affects the data structure. It is therefore recommended to seek expert support from data engineers already during the design phase in order to prepare all systems for real-time processing. The subsequent implementation of the fraud detection solution involves setting up the Kafka platform to capture the real-time data streams and applying machine learning algorithms for pattern recognition.
the result
Fast and precise fraud detection for secure payment transactions
With the newly implemented data streaming platform, all transactions can now be monitored in real time. Thanks to the machine learning algorithms, which immediately identify suspicious activities, fraud attempts can be blocked automatically. However, machine learning not only offers speed: when used correctly, the technology even recognizes anomalies that human observers would miss. Accordingly, banks benefit from such a data streaming solution in several ways: they improve their existing fraud detection mechanisms and thus gain speed and security. The result is a significantly improved user experience with fast and reliable payment transactions, or in other words: happy customers.
Advantages
- Real-time monitoring of all transactions using data streaming
- Fraud detection algorithms more accurate than human observation
- No loss of speed
