Risk management is one of the main areas of action and prevention in both private companies and public organizations. This concept means assuming a commitment to prevention and avoiding unplanned contingencies or limiting the harmful effects that may arise from the activities and operations of the organizations.

Fraud prevention is framed within the various risk management activities. Fraud is one of the main risks assumed by companies in the banking and financial sector given the nature of their operations.

Companies are increasingly facing the management of these challenges from digitization

Risk management definition

Risk management is a structured approach to identify, analyze and respond to the risk factors associated with the activity of a company, institution or organization. 

It is a managerial and strategic professional activity that evaluates the operational, legal, labour, commercial or financial areas of the company to understand what risks and complications may arise in the ordinary run of its activities.

Therefore, businesses and organizations develop risk management plans that are made up of a series of preventive measures to mitigate risk. These measures usually focus on optimizing and remodelling the company’s routine processes to have control over the company’s activities and all the agents that are involved in them, both internal and external.

Fraud prevention 

Fraud prevention is the practice that focuses on taking proactive actions to prevent the commission of any type of fraud associated with the activities of an organization. 

Fraud represents a threat to organizations, business and institutions in all sectors and productive areas, but especially for the banking, financial, insurance and investment industries.

The transformation and remodelling of company processes in order to prevent and deter fraud is not only, in many cases, mandatory for the regulations of certain sectors, but a way to reduce losses, costs and risks.

These methods and controls increasingly rely on technology solutions that completely eradicate the possibility of fraud being committed while modernizing and improving company processes.

Risk management and fraud prevention in the financial and banking sector

AML (Anti-Money Laundering) is a set of fraud prevention and risk management practices. It is the basic framework to start in the fight against fraud in the banking, financial and related sectors.

Establishing AML controls in the processes of, for example, customer acquisition (Know Your Customer Process) in these sectors, ensures the identity verification of new customers. It is curious to see how certain specific fraud prevention methods serve for several different objectives:

That is, we can prevent a potential offender from using our services to launder money while optimizing the registration process thanks to the integration of a single solution.

Solutions that meet AML5 (or 5AMLD) grant full control over the prevention of fraud and mitigate potential risks assumed by companies when carrying out the customer and user onboarding processes.

Download here for free the complete guide on eIDAS and AML5, the standards for fraud prevention.

Technology solutions for fraud prevention and risk management

Fintech solutions, not only useful in the financial sector, are revolutionizing risk management and fraud prevention. They are a substantial advance in regulatory compliance and anti-spoofing controls while optimizing processes and substantially improving the quality of the company’s user experience.

VideoID is a triple revolution: it has completely transformed remote customer onboarding methods with total security and guarantees, it is the first fraud prevention solution that complies with the most demanding legislation in the most delicate sectors and reduces costs, time and bureaucracy, completely digitizing the most tedious processes.

Request here a free 15-days trial of our fraud prevention solutions here.