The cat-and-mouse game between banks and bad actors is finally set to change for good. Financial institutions have historically been on the back foot when fighting fraud, mostly left to reimburse victims and repair tarnished customer loyalty after an attack. The evolution of fraud tactics in the past decade – and particularly the past year – has further exposed how this vicious cycle is perpetuated and why financial institutions alone can put an end to it.
The pandemic gave rise to the mass-adoption of online and mobile banking and with it, impersonation and manipulation attacks. Fresh research from British trade body UK Finance shows impersonation attacks – where bad actors pose as a customers’ bank for example – saw a whopping 94% increase, and GBP 135 million alone was lost in ‘authorised fraud’ where customers unwittingly surrendered savings or investment on the cloned websites of their legitimate banks.
This is a story replicated across the globe. Increasingly sophisticated fraud tactics, coupled with the availability of the largest-ever pool of stolen personal information on the dark web means that today, bad actors enjoy maximum reward at minimum risk by committing cybercrime.
The time has come to tip the balance.
Increasing the cost and complexity of fraud attempts
With a low entry threshold into the world of bank fraud and the general lack of consequences for bad behaviour, the best way banks can up their fraud defences is by making it harder for bad actors to get close to customers and their accounts in the first place. Fraud tactics will inevitably evolve, but an ‘Active Defense’ approach – which blends behavioural biometrics, AI, and automation – can help financial institutions keep pace.
Active Defense in cybersecurity refers to deploying actions that make it harder for cyber-adversaries to carry out attacks. Whether it’s laying traps, deploying advanced forensics to automating incident response, Active Defense seeks to significantly increase the work for bad actors and simultaneously decrease the work required by banks’ fraud analysts to defend against them.
It does so in two steps:
1. Reveal the fraud attempt
First, financial institutions need to identify the fraud attempt in real-time. This means analysing for signs of phishing and malware, for example cloned websites or Remote Access Trojan (RAT) used to hijack a user’s banking session. It also requires the ability to immediately interfere when a bad actor begins to impersonate or manipulate a legitimate customer.
This is where behavioural biometrics comes in. When a financial institution ‘knows’ its user, it knows the way they scroll on a page, the rhythm and cadence of their typing and even the position in which they hold their mobile device. All of this is unique to a user and collectively make up their ‘BionicID’. So, rather than comparing a user’s behaviour to generic clusters of ‘good’ and ‘bad’, approaches based on behavioural biometrics can ask the user ‘are you really you?’
2. Respond to the fraud intelligently
If the answer to the question is ‘no’, financial institutions must respond in real-time and block the attack before losses occur. This is where the power of Active Defense really shines and gives financial institutions the chance to get one step ahead of evolving fraud.
Active Defense against fraud centres around banks’ capability to pre-determine what automatic response is triggered when impersonation or manipulation attacks are detected. These can be anything from requests to the user to provide additional authentication, session termination and even complete account lockout.
Putting fraud analysts back in the driver seat
Robust fraud protection requires always-on fraud responses, but humans don’t work this way. It is therefore important that financial institutions don’t expect fraud analysts – who are already working long hours and are in limited supply – to deal with every threat or behavioural biometric anomaly that gets flagged up by their systems.
Active Defense relies on artificial intelligence not just to detect and respond, but also to alleviate the burden of alerts on analysts. By automating the handling of most types of alerts, it gives fraud analysts full control over and flexibility over fraud responses, allowing them to focus on more serious investigations.
No more whack-a-mole
Active Defense in fraud prevention means that no matter when or where a fraud attempt takes place in the customer’s journey, it is met with proportionate response, providing automatic protection and raising the stakes for cybercriminals to the point where there’s no longer enough of an incentive to perpetrate fraud.
About Richard da Silva
Richard da Silva is VP EMEA at Revelock. Richard has a strong track record of driving sales in IT, cybersecurity, and Fraud Detection industries for the past 15 years. Before joining Revelock, he had a long tenure at RSA Security where he spearheaded Business Development in the French financial sector, following his roles as Head of EMEA Channels for RSA’s Fraud and Risk Intelligence unit and managing Business Strategy for the French and Iberian Channels.
About Revelock
Revelock enables financial services and fintech companies to reveal and respond to online identity impersonation & manipulation attacks without hindering the customer experience. Protecting more than 50 million banking customers worldwide, the Revelock Fraud Detection & Response (FDR) Platform combines behavioural biometrics, network and device assessment with hybrid AI and Deep Learning to create a BionicID and continuously Know Your User (KYU), spot bad actors and mitigate risk regardless of the type of attack.
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