Use Case

Banking Fraud Prevention

Scenario

A banking institution processes millions of transactions daily, including deposits, withdrawals, and fund transfers. With the rise of sophisticated financial fraud, the bank needs a robust solution to detect and prevent fraudulent activities in real-time.

Solution

When Sigma Transaction Monitoring is integrated into the bank's core banking system, Sigma continuously monitors all transactions, analyzing them for suspicious activities such as unusual withdrawal patterns, rapid fund transfers between multiple accounts, or any attempt to game the system.

Sigma acts as a critical intermediary between banks and settlement system providers, ensuring that fraudulent transactions are detected and stopped before they are processed.

How It Works

When a customer initiates a transaction, the request is first received by the bank. Instead of immediately forwarding the transaction to the settlement provider, the bank routes it through Sigma for real-time fraud analysis. Within one second, Sigma evaluates the transaction based on its AI-driven risk assessment models and predefined fraud detection rules set by the bank.

Decision Outcomes

Upon reviewing the transaction, Sigma provides one of the following responses to the bank:

1. Approve – If the transaction is deemed legitimate, Sigma recommends approval, and the bank forwards it to the settlement provider for processing.
2. Reject – If the transaction exhibits high fraud risk or violates a specific rule, Sigma advises rejection, preventing further processing.
3. Manual Review – If the transaction contains suspicious but inconclusive risk patterns, Sigma flags it for manual review. A member of the bank’s fraud team can then log into the Sigma dashboard to manually assess and decide whether to approve or reject the transaction.

Key Benefits

1. Preemptive Fraud Prevention – Stops fraudulent transactions before they reach the settlement stage.
2. AI-Powered Decision Making – Leverages advanced fraud detection models and bank-specific rules.
3. Seamless Integration – Operates within the bank’s transaction flow with minimal latency.
4. Manual Review Workflow – Enables human oversight for edge cases requiring additional scrutiny.

Outcome

• Real-Time Fraud Detection: The system detects and flags fraudulent transactions in real-time, preventing financial losses.
• Enhanced Security: Customers feel more secure knowing their transactions are protected by advanced fraud detection mechanisms.
• Compliance: The platform meets regulatory requirements for transaction monitoring and reporting.