Technology combined with information is key to preventing fraud and financial scams

São Paulo, October 3, 2023 – In the month of cybersecurity, Nubank emphasizes its prevention, protection, and fraud and scam mitigation tools. The institution combines mechanisms based on advanced technology with educational content targeted at customers to reduce the risks of malicious actions.

“Our goal is always to stay ahead of criminals, preventing their activities against our customers,” says Fabíola Marchiori, VP of Engineering at Nubank. “We have a multidisciplinary team that constantly develops and tests our protections, as well as works to anticipate new forms of fraud and scams that are emerging,” she adds.

Protection Pack

From a technological standpoint, Nubank offers what it calls Intelligent Defenses, a protection system built with artificial intelligence that recognizes, alerts, and can even prevent transactions that deviate from the customer’s purchasing pattern. This system is also capable of identifying the opening of fraudulent accounts, invasion attempts, among other malicious acts.

When a customer attempts to make a transaction in the app that has been identified by the defense system as potentially fraudulent, they are alerted by Nubank and can choose not to proceed. In some cases, the transaction may be automatically blocked or allowed only through scheduling for the following day, giving the customer 24 hours for review and cancellation, if desired.

“These defenses have become even more effective with regulatory advancements. This is the case with Brazilian Central Bank’s Resolution 6/23, about the sharing of data and information on fraud indicators among financial institutions,” says Rafael Wowk, leader of regulatory affairs at Nubank. “This allows for preventive actions, such as closing accounts identified as fraudulent in another institution or denying attempts to open a new account by the fraudster.”

Facial recognition (liveness) is yet another layer of protection based on advanced artificial intelligence models. Riskier transactions are only possible after biometric identification, carried out by a cutting-edge system prepared to recognize forged images – including those that may appear real to the human eye.

All Nubank customers automatically have these defenses, as they’re part of what the company calls its Protection Pack. However, it is also possible to activate additional security layers, such as Modo Rua (Street Mode). This unprecedented tool allows customers to set a maximum limit for transactions through the app when they are disconnected from a Wi-Fi network marked as secure. In other words, when they are away from home, they need to undergo facial recognition to authorize a transaction above the pre-established limit.

“Modo Rua is a great example of the relentless work we do at Nu to balance the ease of use of our products for customers with the necessary friction to make it difficult for a criminal to access them,” says Fabíola.

Scams vs. Fraud

In addition to fraud situations, where the criminal bypasses the system and does not require the direct participation of the customer to carry out a financial transaction, Nu is also concerned with protecting against scams – situations in which the scammer relies on the collaboration or participation of the customer, who is being deceived, to carry out the transaction.

“With the advancement of technological defenses, many fraudsters have realized that it is easier to persuade the customer to hand over their money through social engineering than to develop a sophisticated system that surpasses these defenses,” explains Fabíola.

Social engineering is the manipulation employed by criminals to deceive a victim and make them provide confidential information or take actions in favor of the scammer. These scams typically play on emotions: in one of the most common cases, the scammer pretends to be a family member of the victim who supposedly needs to borrow money in an emergency situation; in another case, they claim to be from the financial institution itself and state that they urgently need to block a fraudulent transaction in the victim’s account, and due to fear of losing money, the victim provides sensitive data or follows the instructions of the criminal and carries out transactions.

Nu’s Protection Pack is an important layer of security also in cases of scams, but the company understands that an essential tool to prevent this crime is information. Through constant communications on social networks, in the app, by email, and in its content channels (such as the Blog), Nubank informs its customers about social engineering techniques and how to identify them.

“When a new modus operandi comes into play, we are ready to alert customers and help them protect themselves. For this, we work side by side with organizations such as the Civil and Federal Police,” says Wowk.

On the SOS Nu portal, customers can find all the information about Nubank’s security mechanisms, as well as a guide on how to act in case of theft or scams.