In a recent global banking fraud survey, cyber-related fraud was found to be the most significant challenge faced by financial institutions today. As billions of stolen dollars make their way into fraudsters’ pockets each year, banks stand to lose more than the money, but their customers and brand reputations too. The good news is that digital banking security continues to evolve in response to changing customer expectations, technology, and industry trends. The bad news is that fraudsters too will continue to adapt their tactics to try and bypass these measures.
Banks and other financial establishments are under enormous pressure to proactively protect themselves and their customers from digital banking and payments fraud. As experts in banking app security and digital fraud prevention technology, Entersekt recommends these five ways to mitigate fraud.
1. Educate your customers
Continuous engagement with customers about the dangers of fraud is vitally important. Realistic views of the risks they face, what to look out for, and tips for transacting safely are all shown to be well received. Banks also stand to gain their customers’ trust by detailing the measures put in place to protect their customers from fraud. When banks can show they’ve proactively secured their digital channels and are continually evaluating their options, their customers feel more at ease.
2. Use verified fraud prevention technology
The best defense against digital banking and payments fraud lies in identifying and eliminating threats before any damage gets done. A layered approach to fraud prevention has proved extremely effective at eliminating phishing and other attacks. The most successful systems call on a broad range of security features including device and browser identification, end-to-end encryption, strong app security, malware detection, and digital transaction signing.
3. Messages with meaning
Fraudsters mold to the identity of their victims, which is why it’s so important to confirm the identity of every individual attempting to log on to or transact through digital banking. The most reliable way to achieve this is through multi-factor, out-of-band customer authentication, which is proven to be far more effective than OTPs alone at reducing various types of fraud, including account takeover fraud and man-in-the-middle attacks.
4. Watch out for internal fraud
Unfortunately for banks, they are perfectly placed to attract fraudsters on the inside. In fact, research indicates that as much as 70% of banking fraud is thanks to insiders. The theft of bank customers’ data is of particular concern, as account details and PIN codes get sold on the black market. While measures exist to screen and audit employees, internal fraud can go undetected for quite some time. A bank’s ability to identify their customers, monitor transactions, and raise the alarm about suspicious activity in real-time is of far greater value.
5. Show you still care
Digital banking, although convenient, reduces the amount of personal interaction a bank has with its customers. But fraud is a touchy subject, and customers need an easy way reach out to their banks, report a suspected case of fraud, and be taken seriously when they do. In-app reporting features do well to meet this need, especially when paired with proactive notifications of suspicious activity and calls to action sent via a secure, in-app messaging services.
Entersekt partners with prominent banks and enterprises around the world. Our innovative range of authentication solutions helps them to eliminate the risk of fraud. Contact ustoday to find out how we can fast-track your digital enablement journey.