Wed. Mar 3rd, 2021

Often holding millions There are large dollar targets in assets, banks, credit unions and other financial institutions. However, bank thieves have moved on from the days of robbing branches at massive gunpoint. Instead, criminals use many digital tools and resources to impersonate customers and hack into accounts.

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“Fraudsters are getting a lot more advanced in their approach,” says Ryan Leblond, manager of fraud prevention and investigation for the ESL Federal Credit Union in Rochester, New York. While it can be challenging for banks and credit unions that with the increasing strategy of criminals, technology is also in favor of institutions.

Strong options exist and strong options now exist to protect customers’ accounts. Algorithms, artificial intelligence and biometrics have saved millions of dollars, while ensuring that account holders maintain convenient access to their funds.

People-centric systems create new challenges

In the days before cloud applications, protecting data was easy. A firewall or similar system may be sufficient to protect information from most threats. Today, it is different.

Steve Tarchian, chief information officer and chief product officer of security solution provider XyPro, says, “As companies pass on their significant workloads and storage to the cloud, the security offered to the data center is gone, as the perimeter disappears. is.”

Now with millions of people accessing data from the cloud, security measures have had to be optimized. Not only does a system have to protect its information from outside attack, but it also has to ensure that all the people who use it are who they say they are. These people-centric systems present a special challenge for financial institutions.

“We want us to make sure that we provide education to the call center staff,” Leblond says. Workers need to verify a person’s identity properly before discussing any sensitive account data. To make this easier, financial institutions are deploying new technology to characterize problematic transactions or account access efforts.

Algorithms and AI working together

The earliest automated fraud detection systems rely on algorithms to identify potential problems. For example, unusual transactions or spending behavior may be triggered Warning Customer is required to verify account activity.

However, an algorithm alone cannot accommodate itself. If a customer visits a foreign country every month and confirms that every purchase made there is valid, the algorithm will flag those transactions until it has been modified for this customer behavior. This is where artificial intelligence, or machine learning, comes into play.

Instead of waiting for an individual to adjust the algorithm, AI can tweak the model as new data are collected. Over time, the system can start making predictions based on previous purchases. For example, a large purchase abroad may undergo an uncontrolled system if it fits with the customer’s previous purchase behavior.

“We have not begun to scratch the surface of machine learning and artificial intelligence’s capabilities to withstand security threats,” says Tarchian.

Biometrics in banking

Traditionally, financial institutions have used passwords and PINs to protect account data. In recent years, two-factor authentication has been encouraged to ensure that a person logging in can verify their identity using a code sent via text, phone call, or email. However, none of these can be as secure as using biometric data.

“I have come to the conclusion that biometrics is the only sure way to prevent fraud,” says Brett Bernanek, vice president and general manager of security and biometrics at Neront Communications, which provides conversational artificial intelligence services.

To be most effective, biometrics must be stored in an institution’s system, not the user’s device. Otherwise, security provisions can be easily bypassed or changed if the device is compromised.

As an example of the effectiveness of biometrics, Bernek points to the use of voice biometrics to verify the identity of those contact call centers. HSBC The UK credits the use of its VoiceID security measure as preventing nearly $ 550 million in fraud in 2019. VoiceID uses technology from Noons Communications, and Baranek says the company has also seen a significant decrease in call center fraud activity at other institutions. “Banks that were using voice (biometrics) managed to eliminate fraud through that channel,” he says.

In addition to voice biometrics, financial institutions can use language and behavioral biometrics to help determine whether someone is an account holder using an online chat function or banking app.

Get support from customers

While automated systems are working to detect fraud, financial institutions are hoping that customers will also help with the effort. This means choosing among security measures such as two-factor authentication and biometrics when available. This includes being smart about phishing scams and not clicking on links in unsolicited emails.

“Technology can only be so sophisticated,” Leblond says. Consequently, member education is part of the security mitigation approach at ESL Federal Credit Union. The institution works to notify members of potential scams and how they should receive an unfamiliar email from a credit union, see a transaction they did not authorize or encounter other suspicious scenarios.

Bank thieves are upping their game all the time. But with a little help from customers and high-tech solutions, banks are hoping to preserve the boom and people’s money.

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