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Consumers love the convenience of mobile banking; unfortunately, so do cyber criminals

Portfolio Manager, Counter Fraud and Financial Crimes, IBM

Financial technology, which is increasingly referred to as fintech, can achieve a milestone in early 2016 when the 100 millionth US consumer uses a mobile device to conduct banking business. That landmark transaction could be as simple as checking an account balance or as complicated as remotely depositing a paycheck using a smartphone camera.

Hello, mobile banking—and cyber crime

Whatever the transaction, clearly an increasing number of consumers would rather log on than walk into their financial institutions. And right on their heels are the bad guys perpetrating cyber crimes. Cyber criminals are increasingly using mobile devices to conduct their dirty work. Why? For the same reason consumers are opting for these devices to do their banking—convenience.

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Goodbye, Bonnie and Clyde

Breaking into a bank’s brick-and-mortar building has long been inconvenient, even before the days of Bonnie and Clyde. In recent years, cyber attacks have often succeeded—sometimes spectacularly—through malware attacks, but advances in security technology are closing and locking those vulnerability windows one by one.

However, almost everyone has a smartphone these days—good customers and cyber criminals alike. For banks deploying traditional security measures, distinguishing between the two is almost impossible. For example, many banks still rely on traditional password protection to prevent unauthorized access. But social engineering schemes circumvent that method. Whether it’s a phishing scheme or a fraudster posing as a fast-talking telemarketer, sooner or later someone will fall for the pitch and reveal personal information that provides access to a legitimate account.

So long, savings

Having a customer’s credentials in hand, the cyber attacker is in business. Using a smartphone or tablet, the cyber attacker logs into the bank’s customer portal, adds a new payee—take a guess at the payee’s true identity—and initiates one or more wire transfers to that contact. As a bonus, no guesswork about how much money to request is involved because the fraudster can monitor the bank balance right up to the click that drains it all away.

Imagine how you’d feel if you discovered that your account balance had dropped from several thousand dollars to exactly 17 cents? This kind of cyber crime happens more often than you might imagine.

Thank you, technology

Fortunately, financial institutions can mount effective defenses against cyber crime and fraud with assistance from IBM technology: 

  • IBM Security Trusteer fraud protection software helps detect and prevent the full range of attack vectors responsible for the majority of online, mobile and cross-channel fraud.
  • IBM Counter Fraud Management offers a rich set of advanced analysis tools that automatically detect suspicious customer behavior and unusual transactions. This detection enables investigators to  quickly identify and react to fraudulent activity. 

Working together, these IBM solutions provide a multifaceted view of the nefarious exploits cyber attackers can perpetrate on financial institutions and their customers. When fraud investigators have a comprehensive view of the situation, they can identify activities that would otherwise fly under the radar of individual security components. An integrated approach drives highly accurate risk assessments and creates conditions for fast and effective decision making by banks, which ultimately contributes to fewer and less-severe fraudulent transactions—and fewer nasty surprises for bank customers—than ever.

Obtain more information about countering cyber fraud in the white paper, 1+1= 3: The new math when countering fraud. Then view a demo of the fraud management solution that helps prevent, detect and mitigate fraud and financial cyber crime.