With its ease of use and flexibility, mobile banking is creating a revolution in the provision of new ways for consumers to access their finances. Consumers can access and control their accounts through virtually any device with an internet connection, from which they can deposit cheques, pay bills, transfer funds between accounts and even send money to people or businesses anywhere in the world.
Unfortunately, this revolution in accessibility and convenience is providing new avenues for fraudsters looking to exploit vulnerabilities to syphon money from the accounts of businesses and consumers. As banks open up more and more channels by which consumers can access their money more easily, the risk increases that those very channels could be exploited by fraudsters.
When it comes to fraud prevention, both consumers and financial institutions require practical solutions. From the outset, it is important to implement the fundamental tactical strategies that can offer the best protection. Here are 6 fraud detection/prevention measures used in mobile banking.
1. Multi-factor authentication
One of the simplest and most effective measures is the implementation of a robust multi-factor authentication procedure during the registering of an account. With a good multi-factor authentication strategy which leverages things like out-of-band authentication, a first critical step to mobile banking safety is taken.
2. Consumer email and text alerts
One particularly effective technique for fraud detection is to notify consumers in real-time when there has been unusual activity relating to their account on a mobile device. For example, if an electronic payment is made to a new payee, the bank can notify the consumer by text to ask for confirmation that the transaction is legitimate. This technique has proven effective in stopping fraud and also increasing customer trust.
3. Online activity logging and behavioral analysis
By monitoring the consumer’s mobile account access, normal activity can be recognized and anomalies, such as access from foreign countries, can be identified. The monitoring of online activity, which can be handled by AI fraud detection software, is an effective fraud detection technique. Also new fraud detection companies such as Paygilant or BioCatch, offering Passive Biometrics to combat mobile fraud.
4. Multi-channel fraud and suspicious activity monitoring
A fraud monitoring solution has the following critical components:
Enterprise view & Fraud Reporting; the function to take in multiple data sources across various channels for a holistic view of a customer’s account and suspicious activity. This will include cheques, online account access and electronic payments. FCASE spans the entire financial crime, risk compliance and customer care systems, centralizing alerts and events into one enterprise-wide investigation platform for all your fraud investigation and fraud compliance reporting needs.
Machine learning, Scores, rules and alerts ; the function to generate risk assessments for a customer account based on advanced scoring models using customer profiling and other techniques to detect fraud. Simility and IBM Safer Payments are very elegant solutions for transaction monitoring.
5. Regular monitoring and cleaning of malware
Hackers have managed to steal huge amounts of money by tricking customers or even bank staff to click on links that download malicious software onto a computer. This malware infects a computer to enable the hacker to monitor keystrokes, view emails, capture screens and otherwise steal valuable information that enables them access to funds. It’s vital to have the latest security software to detect and remove this malicious software.
6. Using secure access through HTTPS
The HTTPS protocol enables secure connections over the internet, ensuring a user is accessing the site they think they are. It also keeps all data encrypted to prevent it from being stolen. With HTTPS, consumers are protected against ‘middle-man’ attacks that can result in the theft of personal or banking data.
In the online mobile world, cunning fraudsters prey on consumers and banks by exploiting vulnerabilities. They will change tactics, but usually there will be some hint that something isn’t right about their activity or requests. Vigilance is the best defense against online fraud, and the comprehensive approach to fraud management taken by FCASE is one of the most powerful tools a corporation can have at its disposal. If you would like to explore how FCASE could help to manage your mobile banking fraud, we’d love to hear from you.