Document fraud is a major issue for financial institutions, posing risks to their financial performance, operations and reputation. Fake documents used in lending, investments, payments, underwriting, or insurance claims can result in financial losses, compliance violations, and operational issues. 

Selecting an effective document fraud detection solution is a complex decision. Fortiro has spent years working with leading Australian financial institutions, both large and small, uncovering the essential elements of a robust solution. We’ve identified 12 key areas for consideration based on this experience. 

12 Key Considerations for Document Fraud Detection Solutions 

1. Accuracy and Detection Capabilities 

Effective document fraud detection solutions must identify both subtle document manipulations and entirely fabricated documents. The best solutions employ advanced techniques that detect nuanced changes across diverse document formats and sources. 

Key Considerations: 

• Image Analysis: Many documents are scanned or photographed and then submitted in an image format. That results in two challenges, which an effective solution should be able to tackle:  
   
  (1) Content based checks need to be performed, even on photographs or screenshots. This is important because digital traces of manipulation found in the original document – such as those in the metadata and digital forensics – are no longer be available to check.  
  
  Content-based checks require the solution to be familiar with the document type, understand the content and specifically support the kind of checks that a human reviewer would be expected to perform.
  
  And (2), the solution will need to detect inconsistencies in pixel patterns, compression artifacts, and lighting, which can reveal photo editing, copy-pasting, and other image manipulations. For example, Fortiro has demonstrated successful identification of subtle document manipulations at financial institutions like Pepper Money. 
  
• PDF Forensics: PDF is the next most common document format, therefore the solution must analyse the underlying structure of PDFs, comparing visible text with hidden layers and metadata. Or to put it another way, the solution should have sufficiently advanced ways to identify changes to text or hidden information in PDF documents. 

2. Rules, Reasoning and Scoring Capability 

A robust rules, reasoning and scoring capability is essential for identifying both common and complex fraud attempts, as well as to reduce the alert rates and false positive rates which are critical to maintaining a great customer experience. The best solutions use a flexible rule, reasoning and scoring engine that assesses risk, contextualizes the risk against the document or region and assigns a score to each document based on your organization’s specific risk appetite. This approach allows for a more nuanced evaluation than simple pass/fail checks, which often result in high alert rates with high false positive rates. 

• Risk-Based Scoring: A key feature is the ability to adjust the scoring based on a mix of factors, including the document type, quality, and format. This allows the solution to adapt to your specific business environment and document mix. For example, a lower-quality scanned document might have different risk flags than a native digital PDF, and the scoring system should be able to factor this in. 

• Configurable Reasoning and Rules: The solution should provide clear reasons for a document to be escalated as a potential fraud. Configurable rules provide you the power to disable and enable specific rules and aggregate their scores. This flexibility allows you to tailor the system to your risk appetite and evolving business needs. You can choose which rules and reasons are most important to your organization and how they contribute to the overall fraud score. This level of customization ensures the solution is not a rigid tool, but a dynamic part of your fraud-prevention strategy. 

3. Investigation Capabilities 

Effective solutions should not only detect issues but also offer detailed investigation tools, helping fraud analysts closely examine suspicious documents and speed up their investigations. 

Key Considerations: 

• Does the solution provide in-depth tools to analyze flagged documents, offering metadata analysis, tampering detection, and cross-referencing capabilities? 

• Are visual reports and insights available to aid in the understanding of suspicious cases? 

• Can users generate detailed, case-specific reports for internal review or regulatory compliance? 

4. Coverage of Document Types 

A crucial aspect of any document fraud detection solution is its breadth of coverage. It must be able to handle the diverse range of document types your organization processes. 

Key Considerations: 

• Can the solution handle diverse file formats, such as scanned images, PDFs, screenshots and native digital forms? 

• Can the solution handle PDFs with documents bundled together? 

• Can the solution handle redacted documents? 

• Does it support multi-language and multi-region document analysis? 

• Does the solution have local patterns, rules and data which apply to your data set and region? 

5. Integration with Existing Systems 

A seamless integration with your existing infrastructure is important for fast deployment and workflow optimisation. The solution should fit into your current ecosystem.  

Key Considerations: 

• Is the solution compatible with your organisation’s workflows, software, and databases? 

• Does it provide APIs or plug-ins for seamless integration? 

• Does the vendor provide clear documentation, including self-help materials for your development team? 

• Does the vendor have accessible team members who have experience integrating with systems and organizations at your scale? 

6. Compliance and Security 

Financial institutions must comply with strict regulations and uphold strong standards for data security and privacy. The chosen solution should support compliance, enforce robust security controls, and allow organizations to manage data location and retention in line with regulatory and internal requirements. 

Key Considerations: 

• Does the solution comply with data protection regulations and offer controls to support ongoing compliance? 

• Does it allow choice over where the data is stored to meet data sovereignty requirements? 

• Are data retention settings configurable to align with organisational privacy policies and regulatory obligations? 

• What security measures are in place to protect sensitive financial and customer information? 

• Does the solution have granular user permissions? 

• Does the solution support things such as Bring Your Own Key (BYOK) or Single Sign On? 

• Does the solution automatically redact sensitive datapoints, such as SSNs, TFNs, SINs, etc when rendering documents in a portal? 

• Does the solution provide security logs for consumption into SIEM tools? 

7. Scalability and Adaptability 

A future-proof solution must be able to scale with your institution’s growth and adapt to the evolving threat landscape. The solution should be able to handle increasing volumes and adapt to new fraud tactics.  

Key Considerations: 

• Can the system scale as your business grows and as document volumes increase? 

• Does it adapt to globally & locally emerging fraud tactics and regulatory updates? 

• Can the system be configured to optimize cost, processing time and load/scalability?  
  For example, some use cases require an almost immediate response time (such as for a credit card approval), other use cases require lower cost asynchronous processing (such as high value equipment finance deals, or commercial lending applications with large documents and multi-day decision times) 

8. Ease of Use and Training 

User adoption plays a key role in how effective a solution is. The solution should have a user-friendly interface and provide thorough training to help teams use it confidently. 

Key Considerations: 

• Is the user interface intuitive for both technical and non-technical staff? 

• Does the vendor offer ongoing training and support to ease adoption? 

• Is there ongoing support from a Customer Success Team? 

9. Ready-to-Use Technology  

An effective solution should operate effectively without requiring extensive training on customer-specific datasets, enabling rapid deployment and immediate impact. 

Key Considerations: 

• Does the solution specialise in the financial services documents your business supports? 

• Is the solution immediately operational without needing extensive training datasets? 

10. Cost and Return on Investment (ROI) 

Clearly defined costs and measurable ROI justify technology investment. Solutions must demonstrably reduce losses and enhance operational speed. 

Key Considerations: 

• What is the total cost, including licensing, implementation, and maintenance? 

• Can the solution clearly demonstrate ROI through reduced fraud losses and a faster ‘time to decision’? 

• Has the solution got any proof points, case studies or referees they can share? 

11. Vendor Reputation and Support 

Choosing a reputable and reliable vendor is crucial for long-term success. The vendor should have a proven track record and provide excellent support. 

Key Considerations: 

• Does the vendor have a proven track record in fraud detection, with successful deployments in reputable financial institutions? 

• Is support available around the clock to resolve issues? 

• Does the solution have transparency with regard to system downtime? 

12. Intel Sharing and Feedback Loop 

Fraud prevention benefits significantly from industry-wide collaboration. Solutions leveraging shared intelligence and feedback loops accelerate the identification of confirmed fraudulent documents. 

Key Considerations: 

• Does the solution have a feedback system to report confirmed fraud cases? 

• Does it leverage an industry-wide intelligence network for broader fraud prevention? 

Choosing the Right Document Fraud Detection Solution 

Selecting the best solution means prioritising accuracy, seamless integration, compliance, scalability, and ease of use. A solution that excels in these areas protects your organisation against sophisticated threats, enhances operational confidence, and builds trust. 

Add the considerations outlined in this post to your assessment checklist when assessing document fraud solutions, ensuring your chosen solution can address these critical requirements and meet your organisation’s needs. 

A Comprehensive Solution: Fortiro 

Financial institutions seeking a reliable and comprehensive document fraud detection solution will find an ideal partner in Fortiro. Fortiro addresses all the key considerations outlined in this checklist, from its extensive document coverage and advanced manipulation detection to its seamless integration with existing systems and robust security features. The solution empowers organizations to combat fraud effectively. With its scalable and adaptable design, it ensures continued protection as your needs and the threat landscape evolve. Fortiro also fosters smooth adoption and maximizes the value of your investment through its user-friendly interfaces, training options, and responsive support. 

To discover how Fortiro can help your organisation, request a demonstration today.