Rule-based detection and mitigation of emerging fraud risks in mobile payment solutions at Commercial Bank of Ethiopia (CBE)
Legesse, Wondemeneh (2024)
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Diplomityö
Legesse, Wondemeneh
2024
School of Engineering Science, Tietotekniikka
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Kuvaus
This thesis is available in the LUT University archive. Contact: asiakirjat@lut.fi.
Tiivistelmä
The rapid expansion of mobile banking solutions has brought about significant changes in the financial landscape, making financial services more accessible to the public through mobile phones. However, along with its benefits, mobile banking systems are vulnerable to frauds including identity theft, account takeover and phishing attacks exploited by fraudsters. As a result, these emerging fraud risks pose significant challenges for financial institutions, leading to financial losses and reputational damages.
This research seeks to empirically investigate how efficient rule-based fraud risk detection and mitigation would be beneficial for CBE mobile payment system to mitigate frauds, considering the rapid adoption of mobile banking in the country. The study discusses the concepts of mobile banking related frauds and rule based anomaly detection, and further highlight best practices of fraud risk mitigation mechanisms. A literature review was conducted to review emerging fraud types. Selected fraud detection rules were then applied to the gathered data from the case bank.
The results show that fraud detection using rule-based methods plays an important role in detecting , reporting and mitigating fraud risks within mobile payment systems at CBE. Fraud patterns and behaviors are important data that provide significant insight with a detailed analysis, which makes it much easier to come up with effective mitigation measures. The study also points out that relevant data cleansing and preprocessing are very important in making a fraud detection system work well. It has been pointed out from the study that continuous updating needs to be done in frud detection rules. This will notably enhance CBE's strategies of preventing emerging frauds in order to keep the mobile banking system secure. CBE is also advised to reinforce fraud prevention strategies by considering independent audits with third party auditors for the security assessment to be performed impartially so as to ensure regulatory compliances. Periodic customer awareness programs and biometric verification adoption has also higly recommended to secure mobile banking system from emerging fraud risks.
Finally, the study states emerging fraud prevention and mitigation recommendations adapted to the evolving mobile payemenet system fraud tactics.
This research seeks to empirically investigate how efficient rule-based fraud risk detection and mitigation would be beneficial for CBE mobile payment system to mitigate frauds, considering the rapid adoption of mobile banking in the country. The study discusses the concepts of mobile banking related frauds and rule based anomaly detection, and further highlight best practices of fraud risk mitigation mechanisms. A literature review was conducted to review emerging fraud types. Selected fraud detection rules were then applied to the gathered data from the case bank.
The results show that fraud detection using rule-based methods plays an important role in detecting , reporting and mitigating fraud risks within mobile payment systems at CBE. Fraud patterns and behaviors are important data that provide significant insight with a detailed analysis, which makes it much easier to come up with effective mitigation measures. The study also points out that relevant data cleansing and preprocessing are very important in making a fraud detection system work well. It has been pointed out from the study that continuous updating needs to be done in frud detection rules. This will notably enhance CBE's strategies of preventing emerging frauds in order to keep the mobile banking system secure. CBE is also advised to reinforce fraud prevention strategies by considering independent audits with third party auditors for the security assessment to be performed impartially so as to ensure regulatory compliances. Periodic customer awareness programs and biometric verification adoption has also higly recommended to secure mobile banking system from emerging fraud risks.
Finally, the study states emerging fraud prevention and mitigation recommendations adapted to the evolving mobile payemenet system fraud tactics.