Are Banks Prepared for the Rise Of Electronic Fraud?

Posted by Stephanie Mau

on June 12, 2014

stock photo illuminated bank sign on exterior glass office buildingAre banks prepared for the rise of electronic fraud?

Banks have always had to deal with combating fraud, but these days, the landscape of fraud is changing and it’s uncertain whether banks are prepared to face the new challenges.

For one thing, check fraud is in decline. In its place, electronic fraud is starting to roar its ugly head, and unfortunately for banks, perpetrators of electronic fraud tend to be more sophisticated in their approach.

According to a senior analyst of a financial sector research firm, “Threats are escalating more quickly than what banks or even just other businesses in general, can deploy in terms of defenses against those threats.”

How are banks planning to fight back?

The Federal Financial Institutions Examination Council, a team made up of several government banking regulatory agencies, have encouraged banks to adopt a “layered” approach to security – particularly when it comes to customer authentication.

This means that banks have to strengthen the process to ensure that the individual logging into their bank account is really who they say they are. This goes for the log-in process on bank websites, mobile apps, and any other type of electronic banking service.

Besides the standard username-and-password process, banks have started to employ a bunch of new technologies:

  • Device fingerprinting – tech that recognizes your device using certain hardware and software attributes, and distinguishes it from a fraudster’s device
  • Behavioral analytics – monitors your usual online behaviour and notes any strange or suspicious activity on your account
  • Malware detection – searches for any changes to your web browser that may indicate that it’s been hacked into
  • Knowledge-based authentication – asks questions upon log-in that only you know the answer to (you’ve seen them before – “What is your pet’s name?” or “What is your maiden name?”)
  • Password tokens – these give users a one-time-only password that expires upon usage
  • Transaction signing – with every transaction, a user will have to provide a digital signature
  • Endpoint protection – this heavy-duty protection requires users to download a secure browser to access the bank’s website that can only be used once
  • Voice printing – recognizes your voice when you call the bank, and matches your voice to any subsequent calls you may make

What can I do to prevent fraud?

For now, banks have a simple piece of advice for customers: use more secure passwords and download virus-protection software! This advice does not only apply for desktop computers – mobile devices need protection too.

As for what you can do to prevent fraud in the workplace, implementing an certified ethics reporting system is a good start.

Whistleblower Security is committed to promoting a culture of integrity, collaboration and transparency for all our employees and clients. With a 24/7/365 whistleblower hotline, employees can be assured that all of their ethical concerns will be heard and addressed.

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