Banking scams and cybercrimes: two banks and one wallet bring technology that prevents them in real time.

Hand in hand with the growing use of technology for paying, saving, and investing, cybercrime has grown in recent years. For many financial clients, cybercrime appears as a latent threat, lurking in fake calls or messages and multiple scam attempts. To curb this phenomenon, two Argentine banks and a fintech company have teamed up and introduced a technology into their systems that acts as a "defensive ring" to protect their clients' accounts.

These are Banco Galicia, Santander, and Naranja X, which have joined BioCatch Trust™ Argentina, the first intelligent interbank network for the exchange of real-time information on fraud and scams in the Western Hemisphere, based on customer behavior and device usage. Based on artificial intelligence and the use of machine learning, this system allows for real-time detection of whether a device or bank account is being used by someone other than its owner (in the event of theft or hacking).

It also allows for the detection of accounts that act as "mule accounts," that is, the type of accounts to which money is transferred in the event of virtual thefts. "Mule accounts act as a link between scams, fraudulent payments, and the proceeds of financial crimes, making it easier for cybercriminals to obtain and mobilize their illicit proceeds," said Josué Martinez, Global Advisor for BioCatch Latin America. "Criminals use extensive inter-institutional networks of these accounts to launder their money. To dismantle these underlying networks of malicious accounts, we must provide financial institutions with the ability to combine signals from the sending account, the receiving account, and the network before a funds transfer is made. This is a systemic problem that requires a systemic solution," he added.

In many Latin American countries, receiving suspicious calls, text messages, and emails has become commonplace. Pedro Adamovic, CISO of Banco Galicia, in Argentina, this has been a constant since the pandemic hit in 2020, but as of 2023, it has taken " a quantum leap." "In the last two or three years, we've seen the issue of scams grow exponentially. Increased digitalization makes preventing this type of crime as crucial for a bank as cybersecurity," he commented.

"Criminals are in groups, they're united, and banks, unfortunately, aren't. Companies in general, industries, unfortunately, aren't; they lack a lot of collaboration. And you see that across Latin America," Adamovic noted, emphasizing that this alliance between two "competitors," such as Galicia and Santander, could be the starting point for greater communication between the different entities. "With this technology, we can see online and in real time, before a transfer is made, if the destination account is fraudulent and make the decision to stop these types of transactions."

With this alliance of two banks and a "neo-bank," Naranja X, Argentina becomes the first country in the region to implement this type of initiative, but there are already successful cases operating in Europe and Oceania. The expectation is that other countries such as Chile, Colombia, Mexico, and the United States will join in the rest of the year. "In addition to an intra-country network, in the future a regional network can be created to further limit the impact of these malicious accounts," Marcos Diaz Barrientos, Senior Engagement Manager at BioCatch, explained in an interview with Clarín.

Diaz Barrientos emphasized the importance of networking and the potential for new players in the Argentine financial system to join. The strength of the BioCatch Trust™ network improves with each new financial institution that joins. As more banks become part of this network, the system becomes smarter and more effective, offering deeper insights and broader coverage. This collective intelligence helps protect against existing, unknown, and emerging threats, significantly improving fraud detection across the entire Argentine banking ecosystem.