Digital banking has become the single most effective channel for financial institutions to drive growth, increase revenue and attract new customers. Yet, it also introduces more risk, and cybercriminals are following the money right into the online account opening process. This white paper explores emerging security risks in the account opening process, current weaknesses in technology and business process that are leaving blind spots, and new approaches to managing fraud that are getting results.
A large bank in Latin America was facing significant fraud losses from account takeover attacks. While the bank had implemented a transaction monitoring solution and fraud controls to minimize risk, the system was only preventing less than half of their fraud.
The surge in digital channel usage brought on by COVID-19 forced financial institutions to accelerate digital transformation as a way to address growing demand. With previous investment weighted towards customer experience, financial institutions have had to re-evaluate their digital strategy with a renewed focus on identity proofing as a core requirement to continue operating.
Digital services continue to present cybercriminals with a lucrative target of opportunity. BioCatch research shows that, since the beginning of the Covid-19 pandemic, fraud attempts have surged globally. Account opening fraud attempts have increased 33 percent and account takeover attacks have spiked 47 percent. As attacks get more sophisticated and pervasive, the solutions required to combat them must provide deeper visibility to better detect malicious behavior in online sessions.
A top UK bank launched a new promotional offering as part of the account opening process that piqued the interest of cybercriminals. To prevent fraudsters from successfully navigating the application journey and cashing out on promotion offerings, the bank implemented BioCatch Account Opening protection. As a result, the bank managed to satisfy both business and risk objectives by automatically declining fraudulent applications and safely acquiring more customers.
Today, business starts in the digital world. Financial institutions continue to prioritize investment in digital channels to grow revenue and acquire new customers. It is where new customers want to start a relationship, and where financial institutions want that relationship to begin. But what happens when new customers are not really customers at all?
BioCatch takes a unique approach to solve the Trojan predicament. Rather than detecting a specific Trojan variant, wouldn’t it be better to detect all types of malicious actors, be it Trojans, bots or other adversaries? And what if we could not only protect against current, known, threats, but also future, unknown modes of operation? And finally, what if this detection can be truly continuous, easy to integrate with and deploy, with tools that provide visibility into the user activity?
New account opening fraud can directly impact the bottom line and threatens new digital business models, especially those that rely on growth through rapid customer acquisition. From credit cards and deposit accounts to a wide range of lending products, cybercriminals spare no effort to turn a profit by exploiting weaknesses in the digital onboarding process. This e-book explores the financial and business impacts of new account opening fraud, the effect on customer experience, and how behavioral biometrics can be used to reduce fraud risk and increase customer acquisition in digital onboarding.
Account takeover fraud remains an ongoing problem for financial institutions, e-commerce merchants, and virtually any organization that offers products or services that can be monetized. Last year, account takeover fraud cost U.S. businesses nearly $7 billion in losses. This e-book provides insights into what is fueling the growth in account takeover attacks, what traditional fraud prevention tools are missing, and new strategies and approaches to fight back.
The BioCatch Case Manager tool empowers fraud operators to investigate high-risk activities and provide genuine and fraud feedback in real-time, reducing the fraud-review operational cost and enhancing accuracy of the risk engine based on confirmed fraud cases. The Case Manager tool helps simplify investigation and drives faster resolution, while providing visibility into the fraud operators activities and workload
Within a remarkably short period of time, COVID-19 has dramatically altered the way in which the global population works, transacts, and interacts. Social distancing, a term that was not in most people’s vocabulary just a few short months ago, is the new norm. Fraud and AML operations functions at financial services firms have not typically consisted of a remote-enabled workforce, nor are most operations centers known for ample space between workers, so the shift to remote workers and the requirements of social distancing have necessitated a rapid adjustment for firms around the globe.
The US banking industry has made a significant leap forward by launching Zelle, a real-time p2p platform for moving money from the user’s bank account to an email/mobile contact. In Q3 2019, Zelle traffic was reported to be 196 million transactions with a volume of $49 billion, and many banks in US are now offering Zelle functionality via their online and mobile banking applications.
According to multiple threat index reports issued at the end of 2018, the threat of Remote Access Trojans (RATs) is at an all time high. One RAT made Checkpoint’s Global Threat Index Top 10 list, while Proofpoint reports that the number of RATs doubled each quarter of 2018, accounting for more than 5% of all malicious payloads for the year, marking a significant change from the past.
Zelle is awesome! The highly innovative P2P scheme allows people to pay in real-time from their bank account to any of their contacts. It’s easy to use, super-fast and extremely convenient.
Digital transformation has introduced exponential opportunity in the financial space. The way we manage our money online (via banking, money transfers and shopping) has changed dramatically. We have moved away from a one-time, occasional transaction with a merchant, requiring several steps to checkout, to a continuous, connected relationship and quick, instant checkout. Digital identity has evolved into an essential part of the modern money lifecycle, bringing into the mix issues of securing personal data, privacy and more. At the same time, data breaches and phishing attacks have created an abundance of stolen credentials, turning identities into the most consequential attack vector in the financial world. During this webinar, Ayelet Biger-Levin, VP, and Gareth Campbell, Head of Threat Analytics, will discuss how BioCatch enables the future of money by providing a secure and frictionless user experience across multiple use cases such as account opening, login and payments.
The Policy Manager allows fraud teams to define the actions that should take place depending on the various system outputs, streamlining the implementation process and heightening the usability of the BioCatch system. Going beyond simply providing a best-of-breed risk score, the BioCatch Policy Manager offers flexibility in establishing the actions that should occur if the user behavior inside a session triggers a predefined condition. Instead of building rules based on 0-1000 ranges that have to be well-understood for a particular environment, the Policy Manager allows fraud analysts to benefit from added logic that mitigates fraud in real-time, simplifies back-end operations and assists with gathering data for proactive, investigative analysis.
New account fraud continues to grow at a rapid pace, threatening new digital banking business models and fintech platforms such as Zelle, that are in a customer acquisition race. Convenience, speed and ease of use make digital the preferred channel for consumers, but also open the door for criminals. With 14.7 billion personal records stolen in the last 6 years and the proliferation of synthetic identities making it very difficult to tell the difference between a legitimate applicant and one that will result in loss, new models for identity verification are starting to emerge, with behavioral biometrics as a key component.
Identity is everything on the internet. Every authentication hurdle online users need to jump through, such as two-factor authentication and passwords, is aimed at one goal – verifying the identity of the user. Digital identity has never been as important as it is now and will only continue to grow in importance as digital transformation takes hold.
One-time passwords (OTP) remain one of the most widely used forms of two-factor authentication, despite their well-documented vulnerabilities. Earlier this year, a major UK bank was hit by an attack in which fraudsters diverted text messages from legitimate customers’ phones in order to bypass two-factor authentication and access accounts.
In recent years, Peer to Peer payments have shown a significant increase, passing the $120 billion mark (2017). Currently, one in three American consumers uses P2P apps to make instant payments to friends, relatives, service providers, or anyone they owe money. Since P2P account opening does not require identity verification, it is vulnerable to various types of fraud and threats including malware, social engineering, remote access, SIM swapping, call forwarding and other techniques. Using these techniques, the fraudsters are able to exploit two main points of failure:
As account opening continues to transition from physical to digital channels, financial institutions, issuers, lenders, and other organizations must optimize the digital experience of applicants in order to compete. At the same time, fraud is on the rise as criminals have become more successful than ever, thanks to some of the same digital channel benefits enjoyed by consumers: convenience, speed, and ease of use. To achieve the necessary balance between preventing fraud and providing a delightful experience for consumers, an approach to identity proofing that accounts for the channel, product, customer, and threat environment is absolutely critical. But regardless of the approach, inconspicuous solutions — like those based on applicant behavior — have a distinct role to play in how institutions manage the risk of application fraud.
In an age where the use of smart phones has skyrocketed and consumers require convenience more than ever, financial institutions continue to invest in mobile banking. In fact, the Federal Reserve recently predicted that ~96% of US financial institutions will offer mobile banking by 2021*. With nearly 2 billion** mobile banking users worldwide, financial institutions see this as a perfect opportunity to improve customer satisfaction and in turn increase acquisition and retention.