4 Ways Banks Can Improve Their Fraud-Fighting Efforts

Banks are investing more than ever in fraud detection and prevention efforts. Here are recommendations for getting the most out of those investments.
August 09, 2013


Banks continue to be prime targets for all sorts of cybercrime and fraud. As the risks escalate, so do the efforts of financial institutions to identify the fraudsters and stymie their actions. These efforts, however, also have the potential to complicate banks’ efforts to provide a good customer experience. What are the current and emerging fraud threats to banks, and what kinds of technologies are banks using (or should be using) to combat these threats? How can banks balance fraud prevention and protection of customer information with the need to optimize convenience, simplicity and ease of use for consumer and corporate customers?


Give Customers A Sense Of Control

Today, we see threats associated with denial of service attacks, potential disruptions of sites, not necessarily intrusion onto sites. Phishing exploits continue, as do attacks on individual company databases. We have seen fewer attacks on individual financial company databases to try to compromise data and more attempts to attack our customers directly. Phishing attacks are designed to essentially accumulate bank credentials so that unauthorized transactions can be made.

Over the years, banks have grown accustomed to the balancing act between protection and convenience. As threats change, protection measures must change, as well. Some protection measures are more transparent to the customer. One example is device authentication. Many customers use the same personal computer to conduct online banking, and their financial institutions are able to recognize the familiar computer as a method of authentication.

In some cases, the additional authentication is important to the customer. But the customer can opt into that or not. As an example, banking customers can opt to receive a text message on their mobile phones that a certain transaction has occurred. The ability to set up these alerts according to their preferences gives customers some control over their devices and authentication measures.

Banking customers may have to do something they might not ordinarily do to get a measure of convenience. For example, a customer might use a computer or device he or she doesn’t typically use to log on to mobile banking. This will cause them to answer not some simple shared secrets but maybe some complex information about themselves like transaction information. This additional authentication measure gives additional protection while allowing the customer the convenience of using an additional device.

-- Doug Johnson, VP Risk Management Policy, American Bankers Association

[5 Critical Strategies for Mobile Banking Security]

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